Quotes from fleck's wrap
Time-Fly-by-Night Money Management: For instance, anyone who is serious about doing his homework knows that one consideration is just how strong the demand is for what a business makes. The writers note how little that matters to the OPM crowd: "Now, with valuations less compelling, further market gains -- in semiconductor and technology stocks overall -- depend on a real boost in demand. But investors in chip stocks can't wait for definitive evidence of better times in the industry, lest they miss most of the upward move in semiconductor stocks. Professional money managers are also feeling pressured by the end of the calendar year and the potential wrath of their investors if they don't ride the chip-stock rally to the end."
Machismomentum: Next, the writers let some of those managers speak for themselves. John Leo, co-manager of the Northern Technology Fund, says, "If we sell too early, we're going to be left not participating in a move that our investors expect us to take advantage of. It's not easy." And from Abel Garcia, manager of two technology funds at AIM, comes the wisdom: "It's kind of like a big chicken race, we're all in our cars driving toward the edge."
Of Cubs and Cabs: Exactly, and they can do this because it's not their money. So, as you can see from the quotes I just reprised, this rally has been largely about speculation and other people's money. Before this bear market is through, many of these gunslingers will wind up driving taxis, and that will be a good thing for those of us who would like to return to investing on the long side. |
