You got to be in to WIN. The only stocks that are extremely
overbought are the darlings of the DOW. The following are the returns
for the NASDQ & DOW
3yr Annual Last Comp.
tot rt Rate 12 Mos Monthly
NASDQ *107.3% 27.50% 18.02% 1.4%
DOW *115.3% 29.12% 37.57% 2.7%
* 3 year returns and annual rate from those returns where calculated
from 7/1/94 lows to current closing price, based on a full 3 years.
It is time for small cap stocks, with proven growth, to return to
leadership. As investors become aware of this dispairity, and being
aware of the costs of not being in the market, they will begin to
rotate their money to small cap stocks. Given the current economic
conditions, bonds can not offer competitive returns. Watch for the
NASDQ to start to outperform the DOW, especially on down days, to
confirm the rotation.
MRVC, which has been one of the few networking/technology stocks to
endure slowdowns in Europe, and which is also well positioned to
benefit from the falling value of the Yen vs. the Dollar, will be one
of the darlings of the NASDAQ in the upcoming small cap revival.
Those who are faint of heart may be able to sooth their nerves by
selling well out of the money calls against their stock and using the
premiums to purchase some protective puts. Once we surpass July and
early August, technology stocks will resume leadership and those who
take advatage of runups to sell calls and dips to pick up additional
stock, will be well rewarded six to eight months out.
Wayde. |
