Earlie, First things first. Congrats on Yahoo and Nokia, two bloated sea mammals I know you have been seeking like Capt. Ahab after that pale whale. Your harpoons nailed them but good.
I am as bearish as ever longer term, and my call focus is in two areas: stocks that simply don't have much further downside left, because they have to stop at zero, and those that have gotten clipped but still have a positive quarter coming up.
I do think the Fed's cut will have some positive impact on the techs, temporarily. I am not sure about the rest of the market. People don't buy houses no matter what the interest rate when they are worried about job security. And when the internut people are hitting the bricks, resumes in hand, everyone starts to sweat a bit.
So, I guess for me, it is a change in focus. I was buying few puts and doing a huge number of bear spreads on many of the bloated internut cos. Those are now an endangered species and I really don't chase a $150 stock when it is at $8. There is nothing left for me to make. So, I am shifting my focus to other industries and larger cos. I do think there is plenty of downside left in some of the larger techs, the Oracles, Ciscos, etc., but, I believe many other industries are now as overpriced as techs are. Financials come to mind immediately. The current PE ratios are not trememdous, but the bubble earnings are. The entire Dow looks like a put to me. It has held up much too well, and, yes, I know it has more quality than the death watch Naz, but it also has a lot of crap in it. Remember back when we were all complaining about the Dow on steroids as old line cos. were taken out and new pair of dime cos. added. That has to hit them soon.
Some of the defensive stocks kind of offend me, too. I don't believe that most of them are really defensive. True, you have to have your prescriptions whether you are employed or not, but you can complain about price gouging and elect somebody to get the crooks into line. And that hurts profits, even though unit sales may be defensive.
So, I see plenty of downside left, but some of the places where I was playing games are now demolished arenas. I have to take my wrecking ball to the new construction. <g> |
