mishedlo: Shorting at or near the bottom is as foolhardy as piling in and buying at the top. The time to short was when NASDAQ was at 4000 in August, not when NASDAQ is at 2500-2600.
The NASDAQ is unlikely to go to 1900 because it is a discounting mechanism. It looks out about six months in advance and there is NO ONE who does not see interest rates lower by then. It the NASDAQ does drop into the 2100-2200 range, which I think unlikely, it will bounce back so quickly as to be all but useless to the individual investor.
I am NOT gobbling up "tech stock bargains"; on the other hand, I am not panic-selling quality tech stocks like EMC, CSCO, QCOM, etc. simply because tech stocks are temporarily out of favor. Common sense will tell you that there is probably no more than 1-2 months left in the tech bear market. Without a major exogenous (international) shock or serious internal problems (rampant inflation, massive and widening Fed debt), no NASDAQ bear market has lasted more than 12 months in the last 50 years.
The only winning plays going forward are:
1. Avoid doing stupid things on either the buy side or sell-short side.
2. Diversify. When the market slowly recovers, there will be several other sectors and stocks other than tech that participate.
3. Keep cash on hand to scoop up bargains. No -- I do not mean JNPR at 140, I mean things like battered semiconductor stocks like AMAT, NVLS, TXN (if it dips below 40) that have cutting-edge products, dominant market positions, and strong leadership. Perhaps not right now, but after first rate cut.
Your doom and gloom is as excessive and misplaced as the euphoria in February and March 2000. |
