AR, I think my timetable is still intact. The Xmas lies started to fall apart early December and will continue to do so into off-cycle eps reports by Dell and Hewlett. Every time Hewlett tells the truth, as opposed to all the tech stock spinners, the touts say they just aren't doing well and it is co. specific. Cramer is a real Hewlett basher. Meanwhile, IDC's numbers show Hewlett gaining market share. Those two factors don't jive and the market share story is the truth. Hewlett pays for being honest, but they know how to do business.
We have already seen a great dampening in equity mutual fund inflows. Ned Davis pointed out that from May through November, equity fund inflows in 1998 were half of 1997 levels. And you have a much larger base dog for this inflow tail to wag. And I certainly expect a huge decrease in the cash portion of mergers. AG is at least saying he may not always be there for the market. That is a bluff the market will call, IMHO, but if AG rolls over again, this time the buck and the bond are dead meat. And he can affod that much less than a stock market crash.
The facts are quickly becoming more and more negative in the tech arena. Despite incredible headlines for a few hype cos, reading every report shows weakness either last quarter or expected for this quarter. Even those with decent reports are achieving them at much lower growth rates, with the exception of MSFT. MSFT and Lucent see slower spending due to Y2K, agreeing with my (and several other people's) forecasts at the same time capacity is cranking and inventory is mountainous. The SEC is at least barking at accounting scamsters now, when they've been quiet for the last several years. And, most importantly, we have a corporate sector that simply cannot afford a lot of IT spending if they want to have any chance of attaining their eps goal that determines whether they are one of the handful of winning stocks or one of the thousands of losing stocks this year.
So, I see the negativity building up. Right now there is an understandable reluctance to believe that the hen that laid the golden eggs is now a dead duck (to mix my bird metaphor even more, it reminds me of the old Monty Python skit, "this parrot is dead.") <G>. The tech touts are still talking about a great year for last year when the channel is full to the hilt. Also, to be fair, the decent unit (but not revenue) growth numbers on the smaller consumer pc side have clouded the issue a bit. Most investors don't understand the difference in magnitude.
So, everything is place and the dominoes will fall one by one with a very few being super glued temporarily, such as the MSFT monopoly. And just think what a disaster it would be if the judge rules against Bill the Cat. We can expect one of these dogs to fall, then another for most of the Winter and into Spring. They won't all crash at once, unless we are really lucky.
MB |
