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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Apollo who wrote (4398)	7/30/1999 11:23:00 PM
From: Apollo	Read Replies (1) \| Respond to of 54805

Is the market going to swoon in the next 2 months? Contrarian view from the EMC thread..........stan To: JDN (7285 ) From: john rosser Friday, Jul 30 1999 4:38PM ET Reply # of 7286 OT We'll see...but I think a lot of "cautious" money has already moved to the sidelines (so it will have to come back in, at some point)...everyone knows that August/September is a seasonally weak period for the market...in fact, so many people know, I think we may have already seen its effect (sell-off)..similar to January effect moving into Dec./Nov...earnings boffo, Y2K much smaller problem than anticipated (apparently), long bond at 6.12 (I think that is certainly much closer to its high for the year, then the low...)...we are already seeing some evidence of slowing of U.S. economy (2.3% GDP, consumer confidence numbers)..Greenspan will see this, average the ECI numbers (2 month average, .75, hohum), and not do anything...he won't do anything because (1) it is not conclusive that inflation is growing anywhere above 2% (max 2.25%)..he has enough data to hold off the hawks on the comittee and (2) to raise rates (again) going into Y2K is the last thing he wants to do...economic recoveries in many countries fragile...I think his preferance will be to wait until after January 1, 2000, if at all possible.. Watch "safety haven" capital flow into the U.S. leading to Y2K, reducing the bond yield (along with a friendly Fed) to 5.5% This will help big cap, growth stocks like EMC... Sometime in August, it will become clear to the markets that inflation is not a problem...when it does, I think we will somewhat of a rally...if for some reason we don't, I agree, we will see one beginning in October...but I don't see a lot of downside for EMC here...if, for any reason, it would drop to mid-50's, I would average down... EMC at mid-50's...hmm, company growing EPS at 50%+ selling at >60 PE...wow... At any rate, the Dow is down over 300 pts. in a couple days, and the Naz is down (collectively) 67 pts. in a couple days....I feel real good about my entry point...only down 1/4 so far...heavy down open on Monday would bring out buyers for sure...

To: Apollo who wrote (4398)	7/31/1999 12:17:00 AM
From: Uncle Frank	Respond to of 54805

>> Not yet ready to settle down into near-complete no-brainer mode by investing in the 4 Tech Gorillas. I very much agree with that statement, Stan. You've got a long investment window and a high tolerance to volatility; you should be trying for home runs on part of your portfolio. Even I do that once in a while, but my batting average isn't all that good <g>. I think I'm ready for a period of no brainers. Please allow me to offer an unsolicited advice, though, Stan. I've come to the conclusion that there are 3 primary influences on returns from a normal (non-Gorilla) stock, which follow in order of influence: Investment window Sector environment Specific stock choice You have a long window of investment and have surely chosen a good company to buy, but the summer daze are upon us, and I don't think we will recover until the early fall. Even the hot sectors (telecom, networking, enterprise software) may be cold until then. Re intc, they are the ONLY semiconductor stock I would consider, and have no doubt, they are still an 800 pound Gorilla. My problem is with the sector. While it is still a hyper-market in terms of unit growth, it is not in terms of dollar growth. Compounding this are the high cost of fabs, the cyclical nature of the business, and aherence to the Learning Curve theory, which makes price cutting an industry sacrament. Intel will continue to be a wonderful investment, but it will be outperformed by the other Gorillas. jmho, Frank