Sam, the double and triple of many stocks also followed a short sharp correction of 2 or 3 months and well over half the price was chopped off. Are these stocks you refer to hitting historical highs? Yes, the Internet stocks are an exception, but then they have had an exceptional story.
Funny thing, looking at my own investments, I was slow to sell and then held on to most of what I had. Much of these great returns have simply been getting back what was lost. I bought some as prices hit a ridiculous levels, often with money taken from tax loss selling which was shifted into new names. I'm not a good investor, because I have not really seen double or triple returns. I wonder how many have?
Indexes such as the S&P and the DOW have rise much faster than my stocks. I've failed to buy the obvious choices; Cisco, Microsoft, EMC, Sun, etc and have continued to hold and follow supporting companies that supply these broader moves.
Well, they haven't done as well as investments even though they've often performed just as well. This brings you back to the fact that the stock market is not really founded on fundamentals, but the mass movement of money. The psychologist who sees what the market wants wins. Some of these psychologists cheat by double timing as analysts.
It's a tough call planning for the year 2000. Surely, the lemmings will rush, but when. I think any ground swell of fear should be well respected. At some point, I believe we will have a good correction. In the meantime, every defensive move I've made has been a mistake in the last quarter. Maybe these corrections I fear will be again short and sweet as the reality is things are good and we will continue to see the evolution of technology provide undeniable good investments?
The averages are trading up because a few stocks. The greater market is down over last year. Can the lesser talents in the indexes get financial backing and build the averages higher? Are we doomed to looking at stocks not for their fundamentals, but their "star" status. It would seem like the numbers support more companies getting higher share price while the over inflated stocks either get some profit taking or hold steady. But, is that what the market wants to hear?
In the end, it's all supply and demand. There must be cash waiting to invest for stocks to go up. In October, we saw what looked like a lot of money take flight back over seas. Has the last 5 months been a increase due to these deposits coming back, or due to internal demand from cash that was side lined and continuing trend of Americans taking part in the stock market?
Will the market take back some money now that we have new rumblings of disaster in Japan and Brazil? Is the world looking for a safe haven for their money in the year 2000?
Will Microsoft, Cisco and these other stars continue to perform their magic over the next decade despite any short term corrections that might happen in the next year? Is there true safety in these stocks?
Regards,
Mark |
