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Technology Stocks : Novell (NOVL) dirt cheap, good buy?
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To: dwight vickers who wrote (20816)3/7/1998 2:13:00 PM
From: Paul Fiondella  Read Replies (1) of 42771
 
There could be a divergence

between the techs and the domestic economy stocks that look like they are less affected by Asia etc. (even though Asia swamping the auto market is still only in the pipeline). In this case the DOW could still go higher while the NASDAQ retreats. Not every stock is up at a P/E based on 30% year to year revenue growth. I hope!

The major question is how much more money is out there to buy on the dip. Anyone who bought the techs on the dip Friday is going to get burned Monday. So that may be the first of many lessons that this is not so good a thing to do in this market.

What I think will finally kill this market is the cumulative effect of the balance of payments deficits based on the trade with Asia. That is the real longer term Asia impact. As the dollar weakens under this pressure, the Fed may have to increase rates to protect its value. They will use employment figures to justify the increase. This will kill the market Bull sentiment. Plus as time goes on every sector of the economy except "service" is going to feel the effect of Asia. In the Fall the concerns will mount that we are going into a recession if we see steady downward corporate profitability.

I personally would prefer a racheting down of the market but the hypesters cannot give up until the steam roller turns around and makes them into pancakes. Consider what the average brokerage house is going to do in a Bear market. They have every incentive to hype hype hype. And that's what they do, hype hype hype.
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