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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: JungleInvestor who wrote (82113)12/19/2000 5:25:45 PM
From: hitsoft17  Read Replies (2) of 95453
 
Throwing my 2 cents worth in, I believe the tech sector is beginning to fragment into three kinds of stocks and for the time being should no longer be treated as a group.

-Group one is the overvalued high fliers ( as measured by the PE versus the growth expectation) These have much further to fall. CSCO, SUNW, EMC ( not NAZ of course but...) all are examples with PEs far exceeding the likely REAL growth rate in the next year or so. CSCO could go to 35-40 and EMC to 50 if they fall to strong resistance. Group one is the reason some folks believe the NAZ will go to 2200. They are likely right. The box makers are also part of this group but have been shot and left for dead so they will likely become part of group two shortly. CPQ is a bet to watch here.

-Group two is the group that has hit resistance and are running in channels and have triple bounced. ADCT, FLEX, AMAT are examples. They have reasonable PEs to growth rate profiles but buyers just aren't sure yet. These will pop the hardest when the tide starts to really rise. ( Interest rate cut )

-Group three are those that appear to have bottomed and are showing strength based on sound fundamentals and the fact that they had the hell beat out of them weeks ago. TXN, EXDS, NSM , INKT are examples here ( Of course internets like EXDS and INKT could always blow out)

I think the key to starting into the techs is to look for buys in group three, watch group two closely and stay the hell away from group one until the rate cut and or economy pick up have shown themselves.

For the record I am 50% techs in group two (small positions) and group three(not so small position), 40% patch ( mostly drillers) and 10% cyclicals.

Hitsoft17
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