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Technology Stocks : Semi Equipment Analysis

SOXX 309.36

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To: Gottfried who wrote (3862)	7/6/2002 10:13:04 AM
From: Kirk ©	Read Replies (1) of 95520

RtS, VIX and fear: I don't know for sure but I think the level of fear one can experience depends on how sudden the fear evoking event happens. If all is rosy one moment and suddenly sh*t happens fear can spike big time. But if you have been terrorized by bad events relentlessly for a long time, an increase in the unpleasantness may just make you hide under the table. You're just not able to fear much more than you have. There must be books about this. I read somewhere that VIX isn't good for finding a bear market bottom because what happens in a bear is people slowly capitulate and leave the market for good (or until the next big run up where they jump in near the top again as they were doing in 1999 and early 2000). This is the case for many "young" friends I have that started in the industry in the last 5 or so years. They used to use all available cash to buy stocks and they also did 401K and company purchase plans to buy stock. Now we are lucky if they are buying value funds with their 401K monies while the rest is buying new cars and homes rather than stocks. It is no surprise why the consumer has remained strong spenders as they are buying "stuff" rather than stocks with their salaries. Read the message boards now and there are more people talking about when to next short then ever before... reminds me of all the talk of what internet company to buy by all the new comers in early 2000. I think we won't know the bear is over until years after. I was almost 100% tech stocks when we crashed in 1987 and I think my portfolio took a 50% hit. It didn't really recover until 1990 or 1991 and I don't recall any cataclysmic VIX type event that told people the bull had resumed for tech stocks. In fact, we even had a small Gulf War Bear market before the longer term bull trend resumed and stocks like HWP (now HPQ) bottomed. IBM didn't bottom until 1993 at about a 75% discount from its 1980's peak. bigcharts.marketwatch.com I have heard that VIX is a good indicator for local bottoms... Kirk

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