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Technology Stocks : Semi Equipment Analysis

SOXX 296.92

+0.1%

Dec 1 4:00 PM EST

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To: Return to Sender who wrote (53665)	9/11/2011 6:43:59 PM
From: Donald Wennerstrom	1 Recommendation Read Replies (2) of 95503

OT: I think we can always have a nice rally under the right conditions in a secular bear market. <<Interesting that even as bearish as the article was Martin Pring said a rally was likely. I like that kind of even handed info.>> I too, liked the long term look that is so hard to find in most of the literature. I suppose I also liked the basic conclusion of the article that the most likely situation is the extension of the secular bear market for a few more years. Underneath all this short term analysis we do on this thread(and other threads do as well) I have had the feeling(but no way to verify it by looking at long term data) we have several more years to get over this long term "bear". I often think about the 80's and 90's when the bull was running wild. During that period, people became more and more optimistic about how this action could go on forever. This drove valuations higher and higher which just drove valuations higher and higher. Then we hit 2000. The party came to an end. I must say that it hit me hard as much as anyone. I had a tendency to think that the end of this downward trend was just a few months away or a year at most. Finally it dawned on me that a lot of price "compression" was going on. Even though we had periods where the stock market rallied, the evaluation data moved to lower values, then it moved to lower values again. Now as we look at the weekly postings, PEs and PEGs are in the basement. Earnings are still good, and for the present are expected to be good into 2012, but that isn't moving stock prices up. The "technical" stock area that we follow has lots of cash on hand which for the most part they are accumulating, not spending. Also, Europe and the U.S. have created a spending and debt environment over the last 20 to 30 years that is now coming home to roost. This situation is not going to be easy or timely to overcome. Several years will probably be required to overcome this situation with a lot of discipline required. I think the article was "right on" in terms of the long term outlook. Hopefully in the meantime we can still make some money with short term trading skills. Don

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