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Technology Stocks : FSII - The Worst is Over?

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To: Kent Sarikaya who wrote (2208)9/6/1998 2:04:00 PM
From: Donald Wennerstrom  Read Replies (1) of 2754
 
Small caps have been pounded and the question is a good one - "Is the money ever coming back into small caps?" As I was reading the business section of the L.A. Times this morning, one of the articles commented on that question. The article can be found at:

latimes.com

The segment under discussion is quoted as follows:

"In the stock market, there's almost universal agreement that the best value is in small-company stocks, which have been battered terribly. That doesn't mean small-capitalization stocks will go up soon. They've been inexpensive compared with larger issues for several years, but investors have still flocked to the larger stocks because of their supposedly steadier earnings and greater liquidity. And many experts believe small stocks will continue to lag until big
stocks finally collapse and a full-blown bear market occurs. Their reasoning: If the market stabilizes, investors will continue to favor large caps. But if large caps finally give way, all stocks will be in a bear market. Small stocks, then, will only recover once the bear
market is over and a new bull market begins."

If we are to believe this, we must wait for a "full blown" bear market before small cap stocks will fly. I don't know how much worse it can get for us in the semi-equip sector.:)
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