Very Difficult Year in being long Stocks in 98!
I expect the first half of 98 to be very trying and difficult for US investors. At the outset of the year ( Monday- given a full day of trading ) I think we will see earnings worries resurface for the multi-nationals over the Southeast Asian Crisis. A Reality Check, however, will be coming in the form of 4th quarter earnings to either justify and accelerate the Fears or alleviate them. I expect the worst fears to be realized. In short: I expect earnings to come in much lower than expected. There are some very real pricing pressures out there and its impact will be felt on the bottom line. I will be taking a real close look at Intel's earnings on January 13 (after the bell).
As you probably already know, they have been forced to dramatically cut prices on many of their chips and I don't expect the increased volume on the low end to compensate. I sure hope I'm wrong because it's the only stock I'm long. As far as Cube goes, I really don't expect its earnings to have much of a positive effect on its share price. There may be a little bit of a run up before they announce; but I would expect a sell off after they report! Again, I think we are immersed in a Bear Market here in the USA, the ramnifications of which will be confirmed by the major averages in the first half of 98. Investing long is more of a test in charachter and guts than anything else ( after one has done ones due diligence ). Sometimes a stock gets unjustifiably hit for no good reason. If you feel that is the case, just keep on buying more on the way down and transcend the Insanity! As you know, I did it with Cube last June. But we were in a Bull Market then! It was easier for Cube to bounce back at that time, then it will be now. The only way to play Cube long here is from a long term viewpoint ( although I'm sceptical here too ). I'm a big fan of George Soros, and agree with him that deflation, in the form of pricing pressures and earnings erosion will take hold of the US stock market in 98. I learned all about investing from Professor Jimmy Rodgers at Columbia where I got my CFP after my philosophy studies ( or love of wisdom- though most people view it as garbage, to their detriment ), but don't practice. I reiterate: Cash will be a great investment for the first half of 98. I am 5% long, 20% short and 75% in cash. I think Cube will hit my price target in less than 6 months. I cannot and will not give you an exact date or month. Your asking for more than technical analysis can give. Your disdain for the " almighty chart", like Andy Chen, can only hurt you, as it did him ( actually it helped to destroy him ). I see no virtue in this attitude, as Cube's price fluctuations are friendly to the " Almighty Chart".
PS. For you West Coast Cyber Folks, let me tell you, last night Maria Osmond put on the performance of her life on Broadway ( in the " King and I" ). Boy does she know how to sing and act! She got the ovation of her life last night, in the Neil Simon theater. What a Ham! But she deserved all of it. Bravo! |
