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Technology Stocks : Internet Guru Discussion
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To: steve harmon - analyst who wrote (25)2/11/1999 10:11:00 PM
From: Sgt. Stockpile  Read Replies (1) of 4337
 
Question About The Recent Pullback:

Steve,

Although you predicted a 20-30% drop in the internet stocks late last year, I was wondering how we can accurately (or reasonably accurately) predict these massive pullbacks.

Here's my main problem: At first, a pullback looks like ordinary profit taking. An 8-10% drop in one day is nothing out of the ordinary. But by the time the drop is an actual correction is too late. The stock has almost always corrected.

For example, I am a shareholder of this beloved little company that lets me talk to you -- GNET. I bought it at 50 (a few days following your recommendation) and held it all the way until Tuesday. Before then it was holding strong at 114. I sold at 101 and watched it dip as low as 78 and close at around 88. Thursday, I saw the internets shoot up and guess where I bought GNET again? 101.

For many of us, once we see the bottom fall out, we lose our bearing and think, "If it can hit 78 it can hit 68 just a fast". But Internet Stocks correct and rebound in a matter of days and by the time it's "safe" to get back in, it's just too late.

Do I need to be more agressive and sell on the first signs of weakness and determine my buy-in point simply by saying "hey it's 20 points below what I sold it at" -- or is this just a lesson to hold tight and ride it out?

Thank you,
Sgt. Stockpile
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