You should consider using your short profits to go long and longer-term now. Many beaten down techs will more than double this year. Retracement of 50% is likely in many-many cases. (except some e-tailers which won't survive maybe) And the downside has been diminished to the point where one has to wonder if there is any left. Even those companies with bankrupcy fears should be considered possible buys, maybe even the best buys. Expect interest rates to be at 3.5% soon and for debts to be re-structured, troubled companies bailed out and acquired, inventories burned off and then shortages instead (all those lay-offs and plant closings). Bottomline all those bears who were right about the Naz valuations months ago have had their targets met, tested and re-tested. 1650 on the Naz was what most would have considered to be as far as she goes. Expect two rate cuts between now and May 10 and look at DELL today. And look at the tiny PE's on INTC, SUNW, VZ, WCOM, AAPL, etc., and modest PE's on the strongest companies GE, EMC, ADBE. And many of the micros have more cash than their entire market caps. Battered dogs like LOR have liquidation valued many times their current price.
No the sky will not fall, though some feared it would. Even LU as a perfect example will survive and will probably either double or triple this year, with likely takeover action and large spikes on those rumors. Those stocks which were least popular these past few moinths may now be the best buys, though I'll stay in the middle ground with larger safer lower PE giants. |
