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Politics : Idea Of The Day
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To: giddy guru who wrote (9610)9/17/1997 8:30:00 AM
From: IQBAL LATIF   of 50167
 
giddy- guru- Last time when perpetual S&P contract was at 950-55 region DOW tested highs of 9300- DOW is still 400 points lower and that is a lot of equity cap wiped out or rotated in other sectors- AMAT for me is a good opportunity with a small risk- I initiated this position on last Friday and with a split I think AMAT will look good at 50$- this stock and other tech stocks in my opinion will do well.

I will like you to explain the consequences of this divergence? What is it-If you know many things will clear out as to the dependiblity of the move up.

My views on market are formulated on fundamental issues may be for you its too late in my opinion earnings will justify the valuations- yesterday I wanted DOW to close above 7850- this is the point which need to be breached if the W formation of this consolidation phase had to signal a break out- I think this is a break out - the doubts about continuity of corporate profits have been and will be expressed before that is not an issue here- in my opinion 12-13% increase in a non-inflationary environment is the best bullish sign one can get- when I was predicting the correction I stood by my grounds even when there was a 250 points rally post NAPM- I pointed to purchasers prices and deliveries- soon after PPI market rallied but I remained on the side line citing .3% as inconclusive evidence for rally- but now CPI has confirmed to me a very good economic environment and I am a bull until economic conditions changes-

Last Friday some doubts were expressed on my change of stance but events will proove that I can be a week early but will be on the ball. It is to early in a rally and for me my stocks will perform - I am happy to be back in the so far use to arena of good strong market- with a strong economy.

Strong economy with no inflation is great for corporatye earnings any one who tells you otherwise needs to support his case with solid reasons.

One last one for the closing Giddy- we never ever had a bear market with Russel 2000 taking to new highs- look at the small stock performance prior to 1987- that will be quite an education- the mistakes Byron Wien Barton Biggs make is that they are tied up with a number- don't look at number but look at G INTC potential- Where is Barrons today and their article- my post on MSFT on a day when MSFT was being crucified can give you ample background of why I like to stick my neck out?

For me this correction or any foreseeable downdraft is an opportunity- change the economic climate and I will be a bull- In 1994 when GE was 28$ its EBIT was 469 times price- again this is one of my proprietry indicator - not much used- where was DOW then? Now with GE on 68 its EBIT is 296 times share price- DOW is now at 8000, EBIT share Price ratio has decreasesd - it was in 1994 when market was overvalued not now!
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