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Technology Stocks : Broadcom (BRCM) -- Ignore unavailable to you. Want to Upgrade?

To: Sy Eisenfeld who wrote (3797)	4/14/2000 1:07:00 AM
From: Brian Malloy	Read Replies (1) \| Respond to of 6531

I think you pose the $Million question. I think my last few posts on this thread indicate I remain long term bullish but short term think we should expect more downside or side ways action at best. Don't be fooled by a one or two day spike. We saw that at the end of last week. During times like these, I tend to focus on the Indexs for it is not stock x y or z per se driving the market, but the negative crowd psychology and market in general that is driving the stocks. Where could a potential bottom worse case total wash out take us? Some would say fair value on the NAZ is 2,800. Then you could go back and check the value of your stocks when the NAZ was there and consider it the worse case. I trust that the naz will settle down somewhere around the 3,400 level or so. That would put us around a 1/3 pull back from the 10 Mar high as well as being ~50% pull back of the run from Sep to Mar. It is also interesting to note that over the past ten years the NAZ two worse sell offs have been down 35%; so, that may also be a target the pros are looking at but choose not to tell the individual investor. Instead they get on CNBC and spew forth nothingness. The wild card in my mind is if we get to 3,400 then do we try to test 2,800? I can not say for sure. I do know that heading into a period of poor seasonality will not help us. Many are trapped in their tax deferred savings plans but can only make changes monthly or quarterly or semi annual. If they deceide that having 80-100% in equities or some other figure and that is now a bad idea, what happens when they are able to reallocate? What if they choose to allocate say an additional 20% to money market or bonds once the plan allows them to make changes. Late spring and summer could be rough. Not saying it will happen but all these types of variables must be factored into your decison. A possible repair strategy if taking heavy losses and looking at the long term. As an example sell the stock on a rally then buy a related LEAP (in the money would be best) on the dip, take the tax break next year, just suck up the time premium for now, that represents the limit of your downside. Since you are deep in the money you will trade dollar for dollar with the stock. Keep the difference between the stock and LEAP and put in your sweep account earning 5% or whatever. Look for a good buying opportunity, probably in the late summer or fall. Ex: If some one is being killed with MOT they could sell it then buy a TXN leap for 30 days then switch back or not or some variation on that theme. Many high flyers don't have LEAPS available so Jan 2001 could work, but your risk is higher as well. Some people are utilizing the selling of puts but this is much higher risk and not suitable for the unfamiliar. Lastly, one could simply say, I don't care what I have "lost". I'm focused on what I have gained. From the lows of October '98 to the level on 13 Apr '00 calculate your return. If over the past 18 months you are up 50% or 100% or whatever, you have still done very very well based on a historical market return basis. Simply ride it out, and or don't feel bad about locking in some profits even at these levels. The only real losers are the bears that missed the tech run for the last three to five years. Lastly, while plenty of volatilty exists and good trades will be available, I just don't think a strong sustained uptrend will be seen until the fall when seasonality is on our side. It is early in the tech earnings season but so far the market seems to be saying, it doesn't care. I don't fight the tape when the market rallys and I will not fight it during a powerful downtrend. Remember the old Wall Street saying, Bulls make money Bears make money Pigs get slaughtered Hope this was of use,