Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Lazlo Pierce who wrote (4577)	3/9/1998 7:56:00 PM
From: Pancho Villa	Read Replies (1) of 18691

So here is my take of what may be going on [short term] in the market. In the past, when the market reached these levels, sensible money managers would sell equities and raise cash. However they have been hurt significantly by trying to time the market. They are told that that is one of the reasons why they are beaten by the indeces. The biggest example of making this type of mistake was probably Vinick's huge bet on bonds in Magellan when the market was around 4000. Investors got mad (I was one of them) as they thought they did not have to pay such step management fees to hold long term treasury bonds! This behavior by some of the Fidelity money managers was clearly against the advice on dollar cost averaging given by Fidelity's chairman in the cover of all mutual fund annual reports. AS a result of this, I belive Fidelity may have issued a mandate regarding non-stock holdings like cash and bonds in their equity mutual funds. So here we are with the market ridiculously overvalued and all this guys can do is switch the money from a tech stock with weak fundamentals (the likes of CPQ, INTC, GTW which BTW I think may be a good idea to sell now) to a stock such as BFIT, AOL, YHOO, AMZN, ATHM and others which in the long term are about 100 times more dangerous and have weaker fundamentals but are going up. Watching the market day-to-day it feels like this craze will never end but remember it has not really been that long since these puppies started flying sky high. We have got to give time a chance. pretty soon (how about the end of March?) They (MM's) will start locking in their profits and moving into bargain priced (at least according to the analysts) recently upgraded tech stocks. The name of the game is to get you and me to trade. That is how brokerage houses, specialists, etc. Make a buck. Pancho

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