Stock Attack II - A Complete Analysis Message Board

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Strategies & Market Trends : Stock Attack II - A Complete Analysis

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To: Chris who wrote (3402)	3/19/2001 2:04:13 PM
From: KM	Read Replies (1) of 52237

Not technical analysis based but interesting Random musings: What makes me reluctant to short? Consider this note from one of our astute readers: I just came back from a ski weekend with 20 analysts from Credit Suisse First Boston at their "U.S. Technology Analyst Ski Conference." It was a funeral. All the analysts said to underweight tech and acted as if they have been saying this for a long time. [The head strategist] said he had become negative in September, but for some reason he did not start to downgrade until February. Even [the telco equipment analyst] with all of his strong buys said he had been negative for a long time. The best part of the presentations were the "favorite stocks to buy as tech recovers." Every list had the highest P/E stocks in tech. The winners of last year are to be the winners of next year. I could have found the same list looking for the highest beta stocks in the NDX on my Bloomberg. When asked why the low P/E stocks in tech were outperforming there were two responses. They are defensive and the market is wrong. I stopped saying the market is wrong in '94 when I got my head handed to me as a junior fund manager. The possibility that personal computer fundamentals are better than telecom equipment fundamentals as the reason for the outperformance of the cheaper tech was impossible to fathom for the CFSB analyst team. The investors did not even bother to show up. We were only 30 from the buy side. They probably invited 500, while they were expecting 70 to 80 last week. This is despite the fact that CFSB paid for the hotel, meals in the underpaid world of European fund management, a $4000 weekend isn't something most of us could afford. As a contrarian, the conference made me more comfortable towards continued outperformance of cheap vs. new tech and in the possibility of a trading rally that could suck these bearish analysts back into the bull camp. As a CFSB client, this conference made me thoroughly convinced that their analysts are only glorified investment bankers that can pick stocks in a bull market but have no hope in calling turns in macro fundamentals. I have known this for a while, but this was reinforced by their total lack of understanding of what the buy side is. They analysts can see that Juniper (JNPR:Nasdaq - news - boards) is taking share from Cisco (CSCO:Nasdaq - news - boards), but more than that is too difficult for them. (this is out of a Cramer column - he's a twit but this commentary is interesting)

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