Because of the rotational nature of the declines, I plan to continue targeting individual stocks. I still see technology in the meat of its decline, with semiconductor stocks particularly vulnerable. This week should tell the tale - if SOX breaks to new lows, significant damage will result to still-overvalued favorites like VTSS, MXIM, and LLTC. Many software issues are just starting to give, too: NETE, ORCL, ARTG, BEAS come to mind.
I also see *incredible* denial taking place in the financial issues. I actually need to boost my positions in them further, but brokerage and investment banking stocks should get decimated as the weakness spreads: SCH, MWD, GS, etc.
The ridiculously valued Dow stocks are also very vulnerable: GE, MMM, IBM, BA. And Naz100 stocks that haven't bought it yet: CMVT, PAYX, EBAY, and a few others I need to dig up.
And I have a special category of "stocks to be forgotten". Looking back at prior bears, certain types of stocks are uniformly forgotten. It's not that they're going out of business or anything, it's just that there aren't any buyers. They're typically the imagination stocks of the day: biotechs, superconductors, and alternative fuels all meet this criterion: CRA, PDLI, SCON, CDTS, FCEL, BLDP. They usually trade for cash on hand before all is said and done.
That said, we're deeply oversold, so any bounce will be a violent short-covering affair. Approach with caution.
BC |
