To everyone:
If you are like me, you made a small or large amount of money over the last 10-20 years, investing in the leading growth companies, which happened to be techs in most cases.(My best % investments back 10+ years ago were toy(s) and wmt). Now you feel stupid enduring some, most, or all of what has happened in the last 12 months, even while holding csco, nokia, beas, sunw, orcl, qcom, intc, txn, mot,nvls, brcd, vrsn, emc, sebl, etc, etc.(not insp,arba,cpst, etc).
Well, I just saw an amazing tidbit of info: the 3 best performing stocks of the dow since 1/1 are T, MSFT, and IBM!All up 20% plus. To me, this is as extraordinary a piece of information to absorb as any I have seen yet. Try to even begin to explain why sunw, orcl and csco are in the trash heap, while Ibm, T, and msft are well up since 1/1. Be serious. This is as much about the institutions knowing NOTHING about tech as it is anything else. What they know is that they want some tech, and since they are getting their ass kicked by the market, they will restrict their positions to something they might be able to explain, and nothing more. Later on, when the economy is better, they will put money into stuff they don't get but stuff that their analysts say are the leaders in a sector. And it has to be going up first.
I just don't think their is a better example of poor analysis, sheep behavior, and pure, unadulterated stupidity than the solid performance put in by the stocks of msft, T and IBM this year.The stunningly ignorant institutional crowd has made this into something it is not: the deflation of a bubble: sure, while they pile into the 3 biggest tech companies in the world; valuations: right, try to explain ko's pe; panic by the little investors: oh please!
Maybe the lesson is that nothing that happens in the short run, 1 day to many years, is ruled by anything other than the emotional state of the INVESTING INSTUTIONS, and in the long run, read decades, profits. Amidst the chaos of daily, weekly and yearly moves, we magically trend along in proper mathematical fashion, with free cash flow, and free cash flow growth rates. In the long run. Other than that, its all momentum. |
