About the only things I could buy with conviction would be leap puts on the buy-and-hold-forever stocks.
Accounting rules changed under Clinton, and now they're changing back. Take a look at KO, new accounting will hit earnings by 9 cents in three years. Take a look at the drugs. There was no where to hide in Q2. The funds are being liquidated, the 401(k)s are being liquidated, and these guys are having to sell whatever to meet redemptions, just like the old-timers said they would.
When the 'Dung was at 5,000, I said I thought it COULD go to 2,000. Well, I was wrong. But I had the right direction.
As far as these bouncy stocks, LU, NT, ORCL, EMC, well, Paul Sagawa, a telco analyst who turned bearish on JDSU (and the rest of his sector) at the top thinks LU could go to 10 as telcos have to replace faulty equipment. So LU at $1.50 or so looks pretty good compared to being long PEP.
Still, we're due for a rally here, very oversold, but the general direction is still pretty clear.
How in the world the economy is still functioning at all is beyond me.
PB |
