Here is the entire Newsletter i received by e-mail this morning:
1/5/98
As is often the case with the beginning of a new trading day, a new year
often brings an initial flurry of activity, call it the January effect, the
Santa Claus rally, Hanukkah hustle... WHATEVER you want to call it, one
thing is for certain, Wall Street is back at work and wants to make some
money to pay for a costly holiday season. I expect to see an initial "let
it ride" mentality dictate trading before some genuine concerns creep to
front of all the emotional traders' minds.
Last week, we said we would rather be short than long the market, and felt
the market would break 7880 Dow and start a path to 7687. Of course within
minutes of my sending that out the market promptly rallied 60 points. Some
newsletters have been short since 6400, what can I say. Our strength is in
picking bottoms, but we will not hesitate to come out and say "short" when
we feel you should. Daytraders- we will not always include stops, if you
dont know where you should put them, then you shouldnt be trying to trade.
Many have asked what we expect for 1998. More of the same is the best
answer...
Continued economic collapse, followed by fall sense of security, followed
by collapse etc. Banks will be the worst and best performing sector this
year. Continuing consolidation will boost the group as a whole, however, as
results of these consolidations start showing up in earnings, valuations
will be (re)worked lower, the multiples which were being paid in 1997 will
be a thing of the past. Insurers will likely become the next group to
consolidate, it is inevitable that the currency crises will start taking
their toll on this group, leading to this hot consolidation phase.
Mining stocks should get their share of the spotlight as well in 1998. It
will likely begin with comments from a Strategist such as Cohen, or a maven
such as a Buffet or Soros. Many pro's have been saying lately that last
year's Bre-X scandal kicked off this recent distaste for precious metals
and the stocks of the Companies that mine them. We agree whole heartedly,
of course we feel that the lower priced mining stocks, which are now being
called "junior resource stocks" will see the largest gains, in most cases
several hundred percent, they also carry the greatest degree of risk and
volatility of course.
For the techs this year we see Gateway (GTW) being taken over, and a nice
rebound in Micron (MU), and Sun Microsystems (SUNW) . However, our two
picks for highest percentage gains in the techs this year are Ancor
Communications (ANCR) $5 1/4, and Microware Systems (MWAR) $5 5/8.
Part two of "Outlook For 1998" will go out this evening.
Information above was obtained from sources deemed
reliable but no guarantee exists to its accuracy. All information is
subject to the disclaimer found on our web page.
(http://www.microcapstocks.com)
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Edie |
