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Technology Stocks : All About Sun Microsystems
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To: Charles Tutt who wrote (42877)4/10/2001 11:32:53 PM
From: High-Tech East  Read Replies (2) of 64865
 
... conclusion from the new ContraryInvestor tonight ...

So, now that we have made you wade through the macro details of the current employment situation, here's our real concern. As you know, the employment situation in this country has been tight as a drum over the last few years up until the recent economic cliff diving contest sponsored by the Fortune 500. Macro unemployment hit a multi-decade low only recently. Hard dollar costs of attracting and retaining employees mushroomed for corporate America in the last few years, in spite of the stock option blitzkrieg. Do you really believe that corporate America would be conducting significant employee layoffs if management truly believed this was to be a one to two quarter inventory correction? Especially with the recent last few years experience of extreme difficulty in attracting quality employees in the first place? Also with the cost of training new employees? Of course you don't. The management of corporate America is sending a direct signal to all who care to listen that what they believe to come is anything but a short lived inventory correction. It makes no sense at all to dismiss the numbers of employees they are dismissing...unless they were scared silly that this corporate profits recession will be longer and deeper than the current consensus believes. Much deeper, in fact. The Fed may believe it's just an inventory correction. Wall Street strategists may believe it's just an inventory correction. Our money is squarely bet on insiders, corporate management, who obviously aren't listening to either the Fed or the talking heads as they now hand out pink slips like they used to hand out stock options. Next.

Listen to what is being said in upcoming quarterly earnings releases and how stock prices react. Watch the layoff announcements. Watch the revolving consumer credit picture. Watch the consumption numbers. As you know, we'll be commenting on the whole shooting match ahead. The real stress in the system is readily apparent. It just seems a shame that so many are still devoting so much time to trying to call "the bottom" or every squiggle in stock prices, as opposed to objectively assessing the facts that will ultimately determine those same stock prices over a reasonable period of time.

Ken Wilson
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