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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: hunchback who wrote (83336)	1/13/2000 6:56:00 PM
From: Ken98	Respond to of 86076

Thanks for the links. Regards, Ken.

To: hunchback who wrote (83336)	1/16/2000 6:52:00 AM
From: re3	Read Replies (2) \| Respond to of 86076

from the toronto star : (at the bottom, these two oils are suggested : petrocanada and talisman (tlm) Click' investors should start thinking about `bricks' Investors in technology stocks must have celebrated the new year a few hours early if they watched the year 2000 arrive in Sydney, Australia, via CNN. New Zealand and Australia were, of course, the first two English-speaking countries to enter 2000 and be free of Y2K computer glitches. That was a good omen for the rest of the English-speaking countries and their stock markets. I wonder how many investors were also watching the yield on U.S. long-term treasury bonds jump to a two-year high at year-end. The persistent rise in interest rates throughout 1999 has been largely ignored by investors in the technology and Internet sectors of the market. In the first few days of January, some of the ``click' crowd finally did wake up, reacted to their first interest-rate scare and took profits in the group. That has long been happening to the interest-sensitive bank, financial-service and utility stocks, what market technicians traditionally call front-end stocks. That's because the group usually generates the best returns early in the business and stock-market cycle, when interest rates are also at a cycle low. Later in the cycle, commodity prices rise and the cyclic and resource stocks eventually benefit from the now-booming economy. Technicians refer to these stocks as back-end or end-of-cycle stocks. Some of us also refer to them as the ``brick' stocks. The technology stocks are usually interest-sensitive and will sooner or later react negatively to the current climate of rising interest rates. Investors who are over-weighted in the technology and Internet sector can do two things to protect themselves. First, monitor the trend in interest rates. One of the best methods is to seek out interest-sensitive bellwethers and chart their long-term trends. This week we're looking at weekly closes of two important U.S. stocks that traditionally lead most of the front-end stocks, Merrill Lynch & Co. (MER-NYSE) and Federal National Mortgage Corp. (FNM-NYSE), which is better known as Fannie Mae. The price histories of the two companies are plotted on logarithmic scales, which visually show percentage gains or losses rather than the ups and downs in absolute dollars and cents; and the trend lines in percentage rather than absolute terms. After all, when a stock goes from $10 to $20, it has doubled, or gained 100 per cent. But when a stock goes from $100 to $110, it has gained only 10 per cent, which isn't nearly as significant even though the dollar gain is the same. Note that the chart of Merrill, the giant U.S. retail investment dealer, is almost identical in trend over the past 10 years to that of Fannie Mae. Both stocks also performed well until early 1998, reaching their peaks a few months ahead of the crash from August to October, 1998. The concern at the moment is that both stocks have since spent the last two years trading sideways, and now rest on their long-term trend lines. In the first week of January, Fannie Mae briefly traded below $60 (U.S.), and violated the trend line. But the stock rallied to close the week above $60, preserving the long-term up-trend. Merrill Lynch, currently around $80, also rests on its long-term trend line. Watch both stocks closely over the next few weeks. If both post a weekly close under their trend lines, the technology and Internet stocks could post a significant correction. The second strategy for ``click' investors to protect themselves is to reduce their exposure to technology stocks and increase exposure to the ``brick' sector, including the oils, metals, steels and chemicals, which are traditionally slower to react to increases in interest rates. I think the corrective downleg we saw from August to December in the oil sector is now complete, especially because investors want to buy the stocks before they hit their traditional peaks in the summer heavy-driving season. For instance, Petro-Canada (PCA-TSE) and Talisman Energy Inc. (TLM-TSE) are now currently enjoying a youthful second up-leg. These are your leaders to watch in the oil sector. Clicks to bricks, enjoy. --------------------------------------------------------------------------------