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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Susan G who wrote (83580)	2/18/2000 7:19:00 AM
From: lee kramer	Respond to of 120523

Suzy posts the trades after I print out the Daily Activity sheet every day. "If you notice anything, good or bad" I told her, "let me know." Boy, did she take that one to heart. "How come you only bought 200 shares of CEGE? It was a nice trade, but if you'd bought 500 shares or more you'd have made a really great trade" she said yesterday. "I wasn't comfortable with more than 200 shares" I said. "Besides, you know I only use a small portion of my buying power." "And that's another thing" she said. "Why are you so conservative? There are people making a fortune. Don't you want to be one of them?" "Sure, but I'm always afraid of the market. And I'm a trader. When I see the trade, I make it and take it." "But what about all the 'Gemmers who bought one stock after another at 20 or 30, sat with them and saw them run to 100 or 200?" she asked. "Well, I'm happy for them. But that's just not my style." We go through this dance maybe a couple of times a week. I know she's annoyed, though she tries hard to hold it in. I try to explain. "OK, we're in the midst of an incredible revolution. I've never seen anything like it, and I've been around a while. And a lot of stocks are reflecting this, running way up; stocks that are losing money. LOSING MONEY! But people don't care right now, because they think, and they're probably right, that in a year, two or three many of these companies are gonna make a lot of money. But not all of them. And the ones that don't make it will come back to where they started, maybe lower." "So why not jump aboard and go for the ride?" she asks. "Because there's gonna be a severe correction. It might happen tomorrow, a year from tomorrow, or two years from tomorrow. But come it will. And stocks and sectors that were hot a few months ago are taking a bath. The bloom is off the rose for a lot of the internets; AOL is getting clobbered. AMZN is in deep trouble. A lot of stocks that cater to the consumer are getting hit; those that provide services to businesses are doing great. The telecoms were flying a while ago, now they've backed off. The new hot sector is biotechs, especially "genomics." The box-makers were hot not too long ago. Now, forget 'em. Things are happening so fast that what looked great six months ago is being replaced by new technologies, new companies. I'd like to hang on to stocks, but increasingly I close the day "flat." "This market is going to keep going up for a long time" she said. "You're probably right" I said, "But I'm still gonna play my game. See, for me it's not how much money I make, it's critical that I don't step into a buzzsaw. 'Cause my cardinal rule is TO STAY IN BUSINESS. Investors and traders who are heavily margined can get badly hurt, get margin calls, if we run into a serious correction. We came close in January." "OK" she said, "I disagree, but do it your way. It's worked pretty good. Are you still sticking with your shorts going into Friday?" "Yup" I said. I like these "discussions" with Suzy. We may disagree, but it's a good discipline for me. Lee Kramer