1)When will stock prices recover?
2)Where were we wrong? Is holding tech now still wrong?
Two tough questions but I'll stick my neck out and hope other posters do the same. The technology stocks will start to recover May 1st. That's right a Memorial day recovery. I expect that to be the turn around time for several reasons.
First, by that date all the earnings news will have been digested. Their conclusion will be that the economy has slowed but that some companies are doing a whole lot better than others. ( Listen to the ESIO conference call where the CEO made this point very clear as the analysts tried to bait him into saying that things were poorer than previously thought).Secondly is the amount of money sitting in money market accounts earning less than five percent.Investors can't live with that kind of return and have only one alternative option.... tech stocks with good earning and growth.
Another aspect of this turn around will be the relationship between mutual funds and index funds. Recall that for ten years starting about 1990 smart money said, "why invest in mutual funds because they can't beat the indexes?"But from this year onward its going to be just the opposite. The well managed mutual funds will easily beat the indexes because it will become a stock pickers market. If the Nasdaq hangs in a range within 400 points of where it is now (some stocks will keep it from flying because they are still crashing) then the mutual funds will have the advantage.
Question number 2 Where were we wrong? Is holding tech now still wrong?
I don't know the nature of your portfolio so I will not comment on where we all went wrong.(Is holding tech still wrong?) For about eighteen years I have invested in nothing but technology. I have lost more money than most people have ever made, and I made a lot, lot more than I lost. When I go to Vegas I don't wager a dollar (trading options for all these years has cured me of impulsive gambling). But my Vegas friends keep telling me that if I don't bet I can't win. So I'll repeat the message for you, "If you want to win you have to own tech stocks"
There are dozens of good posters on this AMAT thread. If you PM any of them (Brian, Michael, Gottfried, Daryll, Ian, Jake, Kirk,Cary,Willcousa, Advocate , Winnerstrom and a lot of others) and ask them for their top three picks and make your selections from there, you will do just fine.
Best I can do for now... good luck..Jerome
Others invited to answer these simple questions. |
