RE "It is normally a given that it is better to be bullish at lower levels than at higher, but I think that looking at levels without considering business fundamentals is foolish."...
I agree with that, but don't assume that I am not considering business fundamentals. If you mean current fundamentals, well my response to that is the market is a discounting mechanism. Stocks tend to rise prior to an economic recovery, so I am looking ahead. I am not the only one with this point of view. To quote Briefing.com this evening:
"Has the sector moved ahead of its fundamentals during this rally? You bet... But that is always the case at turning points... Consequently, investors shouldn't wait for a big correction to make the market cheap again... It's not going to happen... Institutional investors will use any dips to increase exposure to the market/sector for fear of underperforming yet again"
Regarding whether the slowdown or excesses caused the tech debacle, I would say both did. Another way to put it is to say it was caused by human nature. The same human nature that tends to make people reluctant to buy when prices are low.
Regarding "disdain for valuations", that is not true. I just think the valuation placed on the stocks is something the market decides, not something that you or other bears can decide for it. There are a lot of different approaches one can have in this market. I go out of my way to study the bear arguments, and they have influenced me. I find a certain amount of validity in them right here and now. But whether I am bullish or bearish is my own call to make. Also, some pretty outstanding investors (e.g. Buffet, Lynch) have argued that one should not try to time the market. I am not buying AMAT at these prices, I am just holding. Regarding the general mentality, I think it is more bearish on techs here than bullish. So by being bullish on tech here, I feel that I am the one who is going against the crowd.
I really don't want to argue about all this. It is fine to be bearish on techs here. You can short AMAT or the QQQ if you want and maybe you will do well with that. But one also has to respect the other point of view. I agree techs should be lower in value now, as should the whole market - in an ideal world that is. The question is whether or not we are actually going to those levels, or going much higher instead. I see lots of postives here, so I think a year from now the Nasdaq will be a fair amount higher. If you can't see any positives with this market at this point I think you need to look again. But all this is just my opinion, and I could very well end up being wrong.
Good luck,
John |
