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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: carl a. mehr who wrote (34805)	11/25/1999 11:28:00 AM
From: PMS Witch	Respond to of 74651

You must correct this at once... Times change. My strategy changes too. Seriously, many respectable thinkers feel that too much of today's high market prices are a result of shares being purchased with borrowed money. It seems simple enough: Buy shares today with borrowed money; watch those shares appreciate; sell tomorrow; pocket the profits. Only one catch: Share prices today have been bid up by people who share this strategy. I've learned that margin is a double-edged sword. I've also learned that second edge hurts -- really hurts! When the shares (CSCO) was put to me in '94, the stock was obviously poised for immediate appreciation: The price was about $2 and the P/E was about 16. (What's today's P/E?) Holding was an sensible decision, though at the time the price had eroded continually since Feb/Mar, making this decision a gut churner. Having a major position in Microsoft, and Microsoft's stability reducing the 'margin danger', I was able to exploit this opportunity fully. This is a case where my Microsoft position helped my overall portfolio beyond its own appreciation. Also, it makes a good case for diversification. The difficulty for me is finding stocks which both perform well on their own and offset each other's weak periods. I wish I had a larger roster of candidates, but I don't. Today, CSCO is pushing my portfolio forward while MSFT is applying the brakes: Just the opposite of earlier. Do I change anything? Hell NO! First, this stuff is expected. Second, I don't know what to do. If I've learned anything over the years, it's to do nothing when I don't know what to do. "Act in haste, repent in leisure." This sounds like I've suffered a 'brain-death' but the truth is I can't see any action with a potential reward greater or less risk than my current course, given my long-term goals. Nimble traders may find opportunities today which I've overlooked. They're very welcome to profit from their abilities, and deserve all the rewards that come their way. Today's investment environment is so difficult that only the best should be at the table. The rest will see their pockets picked clean. I recognize that this game is over my head and I refuse to participate. I'm Chicken! Cheers, PW.