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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE)
SIII 0.00010000.0%May 12 5:00 PM EST
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To: JR2 who wrote (8586)12/27/1997 2:09:00 PM
From: JAG  Read Replies (1) of 14577
 
I've always been one to invest against the crowd. I have found that it is dangerous to invest in stocks when Wall Street give the buy signal. In my opinion, it is time to begin about thinking to sell when they give the buy signal. When they give the sell signal and are negative, begin to think about buying. The long term for Wall Street analysts is about 6 months. This is because the human memory begins to forget what it said 6 months ago. At present you have a long of factors working against techs.
1. Tax loss selling.
2. Fear of Asia
3. Momentum players exiting.

If you think long term, over 1 year you will do very well investing in techs at these levels. You will double your money.

You may see a trading recovery in January due to following:
1. Seasonal inflow of 401K money.
2. Seasonal bonuses.
3. Tax loss selling over.
4. Short sellers do not want to sell in December due to gains. Will sell in January.
5. IPOS are nil in January due to holidays.

Here is another factor to consider. Let's say you buy a long term treasury yielding 5.85%. You have just bought a risk free investment that has no growth potential at a PE of 17x. Compare this to a small cap stock that will growth 15-30% over the next 10 years, even factoring in 0 growth or negative growth in 1998.
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