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Strategies & Market Trends : Rande Is . . . HOME
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To: shadowman who wrote (47557)2/18/2001 1:22:21 PM
From: American Spirit  Read Replies (2) of 57584
 
On Fleckenstein. He may have a few points but then again he is attacking a sector that's already been brought down 50-98% depending on which stock you look at. Calling for LU's "death" is absurd. That's overkill if I ever saw it. If he really think that we're headed for a big long recession then housing might be the place to short as it's been unscathed so far. And to compare the US economy to Japan's is also absurd. Their real estate market in the 80's was so over-priced it was ridiculous. And when it came down the banks went with it. I'm no expert on Japan except to know that they had leveraged themselves like no other economy for infinite limitless growth. The US market and real estate is relatively fair valued, in fact it's cheap by comparison. True you can find a few richly-priced stocks like CIEN but maybe they deserve it. To attack IBM is senseless. IBM is doing fine and was undervalued not overvalued all throughout our tech boom. IBM has something like 13 billion in guaranteed income per year on longterm contracts alone. There has never been a bubble there to burst. So perhaps Fleckenstein is being over pessimistic or even trying to prop up a short position of his own. I'd take it with a grain of salt. It's easy to be pessimistic after a big sell-off but if there's tech blood in the streets maybe that's the contrarian indicator. All about picking the bottom and we frankly won't know where it is until we've already been there and moved back up. At least short term I expect a bounce from Friday's big sell-off.
And stocks like VZ and IBM will probably remain safe havens. Because they were undervalued not overvalued to begin with.
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