Metamarkets.com: I've got a secret
community.metamarkets.com
By Alan Luber on 16:44 01.30.01
I've Got a Secret
Late last night, JDSU announced a layoff of 700 contract assembly workers.
It almost seemed as if JDSU released the news at 10:00 last night in the hopes
that nobody would notice. Well people did notice....it just didn't matter.
Just two months ago, such news would have prompted a massive, across the board
sell off in all technology stocks the following day.
Instead, JDSU actually went up more than 2 points today.
What's happened? I think it's a combination of everything that I've been talking about all year.
It's clear evidence that that bad news is still built into current stock valuations -- even after the recent January rally..
It's opposite world, redux: people are looking past two bad quarters
and buying stocks on the expectation of better things to come.
It's people starting to realize that tech is value, and value is not.
(Last night, Aarron Task and I exchanged some e-mails in which he worried that technology stocks
were trading at high valuations again. I had to point out to him that although
Foundry Networks has rallied from 13.5 to 22 since I purchased it a month ago,
it is still just a smidgeon lower than it's all time high of 212. Just a tad, mind you.)
It's falling energy prices.
It's the Fed putting a bottom on the market a few weeks ago with a 50 basis point rate cut,
and reinforcing the bottom tomorrow with another 50 basis point cut. (Heaven help us if they don't!)
Its the promise of more rate cuts to come, leading to the eventual recovery of consumer confidence.
It's the Fed supporting GW's plan to cut taxes, in effect forcing the democrats to go along.
Its former Fed governor Robert Heller stating emphatically that the Fed should lower interest rates
"by at least three-quarters of a percentage point" tomorrow.
It's Trent Lott supporting a lower capital gains tax.
And, to be fair, its the January effect, which could lead to a pull back in February --
but not to a retest of recent market lows.
It's everything unfolding exactly as I described in my new year's day column.
And I'm pleased to report that the bears are still out there in full force
with their predictions of Armageddon. Yes, it secretly delights me that the bears
are just as blind to the inevitable end of the bear market in 2001 as the bulls were in 2000.
I'm pleased every time I see a negative article by Scott Moritz or Jim Cramer
trashing the telecom sector. It tells me that most people still just don't get it.
And while I am not vindictive, I hope these guys are short every technology stock
in existence. Well, maybe I am vindictive. What the hell.
And most of all, I'm relieved. I'm relieved that I don't have to hold my breath
and take a nitro tablet every time I hit the refresh key on my Yahoo portfolio.
I'm not as optimistic as Larry Kudlow, but it is clear to me that he is more right than wrong.
My contemporaries will remember the old Gary Moore panel show, "I've Got a Secret."
Well I have a secret. The markets are on the mend. Just don' t let the bears know.
The longer it takes them to figure things out, the more massive the short squeeze later on.
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My own bullish 2c :
Markets o n l y go up when there is money flowing INTO Wall Street:
-5 trillion Budget Surplus
-a tax cut on the way
-agressive Fed rate cutting with more on the way.
-A President with an MBA from Harvard ( 1st Prez with an MBA )
- a Congressional Majority Supporting the President
this is all quite simple,
TA |
