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Technology Stocks : Aware, Inc. - Hot or cold IPO? -- Ignore unavailable to you. Want to Upgrade?

To: P314159d who wrote (7910)	3/3/2000 8:08:00 AM
From: Jess Beltz	Read Replies (4) \| Respond to of 9236

I think I understand what went on with AWRE yesterday. There is absolutely nothing wrong with the stock or the sector. Witness RTHM, which was (a) beaten down in the last two weeks, (b) had killer earnings two days ago, and (c) was up over 3 1/2 yesterday. So what happened with AWRE? The answer has to do (once again) with jitters over the interest rate environment. In glancing at different portfolios that I follow, I saw yesterday that many of the stocks which have had tremendous runs lately were off substantially yesterday (Ciena, for example, down 19 1/2). Now AWRE has had a nice upward movement over the past 2-3 weeks. There is some key economic data coming out today, see: cnnfn.com and traders are worried about what that data will imply for future rate hikes. If the data comes in suggesting that the economy is still accelerating, then there will be no easing in Fed policy, and that will hammer the markets, beginning today. Traders therefore want to be (at least partially) on the sidelines until this uncertainty clears. Traders have to be more risk averse than is true of investors. We, who are in it for the long haul, can be less concerned about daily fluctuations in the stock price, being much more certain of the long-term upward trend in asset valuations. If you make your living off of trading, you aren't playing long-term trends at all, but rather very short-term trends. In that arena, recent (and perhaps substantial) gains mean much more than the opportunity cost of possible near-term future profits - the "bird-in-the-hand" idea. Therefore, yesterday, I think we saw traders deciding to lock some recent gains as insurance against a possible substantial downward movement today. If anything, I think the downward movement being as small as it was was actually rather bullish. Now there could be more downward movement today, but I actually think the market is beginning to discount Fed Monetary Policy impacts. I had three bankers make a presentation to my class last night, and their chief economist is calling for no more than two more 25 bp rate hikes in any event. Also, given the money migration towards techs, we stand to be huge beneficiaries of the ongoing sector rotation. Hang on. I think things will work out for us just fine. jess.