Chances are good for a sustainable rally now going forward.
Give or take a pullback or two. When you look at the PE's David Faber put up on SUNW, ORCL, CSCO etc. and see they are all in the low to mid 20's now, and INTC in the mid teens, VZ still at 11, and if you remember that the internet-wireless revolution just had a giant hiccup but continues and will continue at a feverish pace, and as DELL puts up good numbers, and you recall super-bears calling for a bottom on the Naz of 1650 (which we got), then it's rational now to assume that some of the huge hoard of cash on the sidelines and in fully or over-valued defensive issues (retail, energy, drugs), is going to go back to techs for future growth profitability. Is it safe to back in the water? It would seem to be.
Now if we could get an interim rate cut and another in early May combined with consensus that the bottom is behind us and needs not be re-tested, then stubborn shorts are going to get hurt badly (reading the threads there are many drunk and addicted to shorting who see no end in sight and still think CSCO will hit single digits and will not stop until they're squeezed to death).
I'm watching EMC hold 30 and remembering that the storage business can be postponed but not halted as all that info has to go somewhere. Even the bearish targets I've heard say 45 for this stock this year.
I also continue to love VZ despite their minor slowdown in new wireless customers. Compared to any competitors their PE and valuation are miniscule and their position dominant. Staying with VZ and EMC as my two largest holdings and considering some SUNW, CSCO and INTC on any pullback here. Wish I had bought more the other day. But at least got my 350 EMC at 25.20 which was just about the rock bottom. |
