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Technology Stocks : INTEL TRADER

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To: Chris who wrote (4587)	11/11/1998 2:01:00 PM
From: John Harton	Read Replies (3) of 11051

To Chris: RE: Mr.G & Sector Funds Info. FWIW The following are 6 month performance ending Aug 31 98 for the top 10 and bottom 10 Fidelity sector funds. TOP Health Care -.12% Computers -.90% Retailing -3.14% Utilities -3.22% Multimedia -4.36% Medical Eq&Sys -5.30% Consumer Indust -6.85% Leisure -7.35% Business Serv. -7.63% Food & Agric. -8.03& S&P 500 -8.10% BOTTOM Paper & Forest -25.51% Industrial Material -25.80% Chemicals -26.10% Medical Delivery -26.55% Home Finance -26.84% Environmental Ser -26.97% Natural Resources -27.25% Precious Metals -38.81% Gold -41.79% Energy Service -49.55% Observations: a) The top 10 are mostly "consumer" driven. b) The bottom 10 are mostly "commodities". c) When the market tanked in August those that didn't "flee to safety" in cash, bonds, or T-bills obviously didn't like gold but did like utilities. Questions: a) If commodities are out of favor and gold is no longer a safe haven, isn't deflation a greater concern than inflation(Mr. G's main boogie man up til now)? b) If consumer spending is the main engine driving this economy, won't the 4th quarter retail sales be a prime focus for the fed? Hence IMHO.... The fed will probably cautiously(deflation fear) make one more 1/4 point drop before the end of the year but may wait til December when the first results of the late November retail sales are coming in. Timing: The market(in its irrational wisdom g) will probably react more strongly if the move comes on a "surprise" date(as it did in October) rather than following a regular fed meeting. Any end of year rally, however, would most likely be offset by fund managers dumping their "embarrassing" holdings and investors taking EOY tax losses on their losers. BWDIK etc. -John PS. THE GOOD: Happily holding INTC JAN0 LEAPS +300% THE BAD: Sadly sold INTC JAN99 at small loss last week. THE UGLY: Still holding AMAT JAN99 bot @6 now @2.

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