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To: uu who wrote (19313)	7/16/1999 6:28:00 PM
From: shane forbes	Respond to of 25814

Addi: Yes I agree with you about Microsoft. Just a few days ago I was writing something to someone saying that MSFT's P/E at 75 at that time was actually justified. LU I don't follow too much but you're right it looks really high. CSCO is my favorite of a good company being way too high (but still likely not going down...). These are popularity contest stocks. They are the biggest of the big and are considered 'sure winners' by so many people, are in so many 401(k) accounts, are in so many asset allocation funds (consider if you had a billion dollars how you would do an equity allocation WITHOUT having MSFT et al in there!), are the 'gorillas', are the only stocks people without financial experience will buy, are the first stocks peole buy on dips and so on. I have been a net seller in all but 1 month this year and overall have been a net seller this year (just like last summer when I was a big time net buyer). I only keep stocks that I think are low to fairly valued. Still if there is a market correction I don't think I will be saved - last summer was a perfect example of this panic driven urge. But I have a hard time pulling out of the market since I tend to be fully invested all the time and can't keep cash without feeling out of place! The most I have had a significant amount of cash sitting idles in the 3 years I have been doing this is about 1 week - usually I can find enough of the small caps to take the cash post haste! If we get a 20-25% correction I am dead! My hope is to see some stock rotation - there is still plenty of liquidity around and I don't think many asset classes that can absorb it. Last quarter small stocks outperformed the rest of the market by a wide margin but this quarter it has reversed (guess). What would kill me if everyone all at once starts pulling money out of the market. Because then sure as pie my small stocks will collapse much more than 20-25%. Having said this INTC should be 20-25% lower and CSCO maybe 10-15% lower (at least). MSFT is probably ok even at this monster valuation. Greenspan can kill the goose quickly if he unexpectedly raises rates - he likely won't but still that would dampen things quickly. A few weeks ago things were fine then bang they got overinflated very fast. I don't think it was a coincidence that Greenspan raised rates 1/4 point and said no mas for now at about the same time! For me the way I can tell if the market is overvalued overall is if I have a hard time finding things to buy. So far I find plenty of stuff below most people's radar screens (The only time in the past 3 years I did not was October 1997). My problem is that I am one of the few who buys and am usually left holding the bag as the market crashes <sigh>. Finally as it pertains to the chip sector the chip industry tends to be an early sector choice when economies recover. If you assume we are a global market now then since Asia and Japan are recovering it might be safe to say that it is overall economy recovery time (Europe's fall looks not too dangerous so far.) Hence chips go up. The problem is everyone can't chase the same stocks at the same time. Then it becomes bubble time. I note that MOT is flattish since earnings and overall it looks like (with the smaller companies excepted) it is + or - 10% post earnings compared to pre-earnings - this is not bad compared to the run-ups they've had. Maybe everyone is waiting for the season to end. Not sure. I agree with you let's see how many have the strong stomachs after all the earnings excitement is over. The chip biz esp. wireless, storage, and networking is still strong - maybe unusually so. We'll see.

To: uu who wrote (19313)	7/18/1999 5:49:00 PM
From: country boy	Respond to of 25814

Well folks: Here we are at 50; a high since I've been playing with this one. Will it now pullback after hitting so many analyst's targets of just a month ago, or are we headed to new all-time territory? I sold at 45 and never got my pullback to 40; I've done percentage wise better with the $ in CY, ITDI, and ISSI, however, as they have outperformed LSI in the last three weeks. Addi, I tend you agree with you on a correction possibility based on valuation; I'm looking for a pullback starting the end of this month and going through August where I hope to still get LSI at 40 or better; might not happen, though, and hurray for all longs still holding.