Semi Equipment Analysis Message Board

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Technology Stocks : Semi Equipment Analysis

SOXX 288.52

-0.3%

Nov 14 4:00 PM EST

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To: Donald Wennerstrom who wrote (12410)	11/6/2003 6:38:03 PM
From: Sarmad Y. Hermiz	Read Replies (1) of 95420

>> We have a situation where any "good news" brings out fear that the Fed will hike interest rates sooner than later. Don, that's exactly right. Which makes the current situation so much fun to play. Though with substantial savings at risk, the fun is less and the stress is more. As you know my view is that current stock prices are disconnected from economic value. Propped up only by sentiment and "greater fool" pyramid scheme. However, all is not lost. The small investor has a special friend who does the heavy lifting for us. That friend is the mutual fund / brokerage industry whose job is to corral sheep into the shearing stalls. But for the effort to be worthwhile for them, there has to a good growth of wool on the sheep. That comes from earned income savings. So now we have ideal conditions for wool growth. Employment is increasing. Which generates savings. Which flow into mutual funds, who then buy stocks. People have a couple years worth of savings, which are now available to buy stocks. The Fed's job is to insure that savers do not have an alternative to stocks. But the twin deficits are eroding its ability to fulfill its mission. It's a transparent structure. I think it can be navigated by the little guy with a proper model of its workings. The basic calibration parameter at this time is how to gauge the effect of interest rates. I have no good way to do that. So as soon as they start to rise, I'm out. But tomorrow, us longs will enjoy the day. I think nasdaq will open above 2000. Sarmad

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