Real Stocks - Part 3: - Monday will likely be ugly for the box makers - its a sector that probably best be avoided in the near term. CPQ risk to 22-23 IMO, and wouldn't be a rush to buy it there either. DELL - could get ugly too. MUEI is already in intensive care, GTW and AAPL, are at risk. IBM is already de-emphasizing PC's while setting up a web-site for direct sales. The reason: low-end PCs are squeezing margins ( what else is new in this biz). For $600 today, you can get one heck of a box, for 1,500 you could probably replace NASA's computer system.
But this growth in PC sales, while putting incredible pressure on the box makers, means that the level of PC sales will continue to explode. Have a friend who signed up for AOL, tried to access it with his 486, 4 meg ram, 14.4 modem - was ready to rock and roll on the web - and got totatly frustrated. So he buys a $1,000 Aptiva from Value America that is loaded, and comes with 17" monitor and free color printer. So his 50 hour free trial with AOL will likely result in a subscription. and he wants to surf ebay and email his kids, and who knows what else. the point: while box makers might suffer, web-related stocks will only benefit. Also, while MSFT might get tagged monday, guess what operating system all these new computers will have.
Real Stocks: I have divided my holdings into 3 basic camps:
1. Good long term stocks - don't trade : WMT, WCOM, T, MSFT, INTC, DELL, AOL, GE, JNJ, STT, MMC ATHM, TWX, CBS etc. don't check them during the day, will take a major change in the company's game plan to warrant a sell, or something better come along.
2. Undervalued or unrecognized situations: COMS, KSU, MAT, DIS, HYPT, FGI, CD, HYPT, CVG, FRO/GBLX, GIC etc - stocks that have great fundamentals (MAT, DIS, CD) but have been underperformers. Beat up stocks (COMS, FGI, CD). Special Situations: FRO (see earlier post) KSU- Kansas Southern RR -RR? yup, KSU happens to have a little financial subdivision that owns berger funds and janus funds. article in today WSJ talked about janus pulling in 1.5 billion a day. I'm buying the company that owns janus and is planning a spin-off.
3. The I-nuts: AOL, YHOO, ATHM are the 3 musketeers of the Internet, IMO. any look at who is going to benefit from online trading- aren't you glad you grabbed 5 points in NITE or ERGP and missed the other 60. still haven't nibbled on ebay, amzn, ivil, etc, but have huger gain in CMGI, and play a few more. The internuts are still underowned by institutions and individuals. Yes they are risky, yes they are over-priced, yes they are volatile, yes I have a fair % of my money in them - and hold 'em.
More ramblings:
Out of favor sectors: oil, oil service, asia, latin america, and financials seem to be coming back into vogue. personal opinion is that we have seen the bottom in oil and oil service stock prices and there will be a huge run from here. paul says off-shore drillers are best play - maybe RIG, FGI, GLM. not as sure about the financial, but at least a good short term run. Asia mutual funds are up 10% YTD, Latin America is up 20% YTD. Anyone look at fast foods lately? - YUM !! Retailing - very strong (except S)
Short term trading vs investing: Yup, cheap commission, instant access and executions are the greatest thing since flush toilets - yes, day-trading is replacing sex as america's favorite activity. but that doesn't replace common sense. The dow has moved from 7500 in Sept to 10,200, i-nuts are up 2-300%, the NAS has exploded, and people are still short term trading. HELLO.
Trading what you know: while tempting to jump from one hot idea to another, I have come to learn (intimately) the action of certain stocks. Some stocks are nice stocks for me (AOL, YHOO, HYPT, CVG) - some are nasty (CPQ, ONSL) guess what - i'm staying with the stocks that i know and that know and like me.
enuf rambling. good luck all. |
