SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Novell (NOVL) dirt cheap, good buy?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Don Earl who wrote (19230)12/23/1997 8:53:00 PM
From: Paul Fiondella  Read Replies (2) of 42771
 
Off topic---Korea

In reply to your question of Wall Street's obsession with Korea.

Well not too long ago it was Wall Street's ignorance about Korea. You are just seeing the other side of the coin.

Korea's impact on us is two fold.

First on the international financial markets. There are American financial isntitutions that have participated in loaning money to Korea. Like those in Japan and Europe these institutions are going to take a bath if there is a default or debt moratorium. Secondly there is an indirect impact on Japan which is itself in banking trouble and has a lot of loans to Korea. If Japanese banks cannot get their money there may be more of a meltdown in the Nikkei which in turn will cause more Japanese companies to fail. IF Japan slips into the pit its 1929 all over again.

Second on trade relationships internationally. Here we lose markets and earnings to a slow down in Asia (nobody buys anything) coupled with the competitive devaluations that may take place as the Won falls. There is pressure on Asia to export to the US to get out of this mess. With each Asian country trying to export against its neighbor and currencies being devalued you have mounting financial instability just as we saw in Thailand and Korea possibly hitting China. China brings into the scenario political instability.

I do not find any of this positive. Although there is no reason to believe that the US economy will see the effects (other than a Japanese meltdown) immediately, you can expect negative earning reports which in an overvalued market spell TROUBLE. I expect a recession by the end of 1998 and several slow quarters coming up.

As to the street, I cannot believe the MSFT meltdown. I can't find any reason for this to have happened in such a singleminded one way free fall other than psychology.

I have bet on a bounceback in Jan. as earning show MSFT doing better than expected again. That means I have covered my short positions. I have not gone long and am very loaded up on cash.

The longs are going to suffer very badly except for those that rotated out of their most profitable stocks into very good 1998 picks.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News