Scott RE "We've been through a complete cycle since
Fall, 1998 and we've now begun anew. Expect this one to end Spring, 2002."
Ahhh........ if it were only so simple.
Unfortunately for me it is a little more complex.
Under "Normal" circumstances, a full cycle would include a period of severely depressed
revenues, a large drop in bookings and of course earnings disasters that show losses.
We have not had that this cycle, or perhaps I should say, for the front-end companies anyway.
So, if we are starting a new cycle , then it would mean in essence 2 stock price cycles
within one business cycle. I don't recall that happening before.
Stock prices are far above previous cycle lows, and the fundamentals are deteriorating.
From my perspective, this is not the "no brainer"/ buy the bottom cycle low we had in
1996 or 1998. You do have a point though, if enough people look at those long term
charts and believe in an eternal 2 year cycle, it will become a self fulfilling prophesy
regardless of the underlying business fundamentals.
I remember spring of 96 had a similar rally that gained 50+% from the lows, in the
face of declining orders, but it stopped about there and the sector dropped to new 52 week
lows. Hey , I'm not saying you're wrong, every cycle is different, I'm just saying that for me
it is harder to commit funds here than at other times in the past.
Regards, Eric. |
