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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (31406)	5/10/2000 7:39:00 PM
From: IQBAL LATIF	Read Replies (2) \| Respond to of 50167

<<when a company is growing its numbers at 50%, it makes good business sense to use its stock as capital, rather than cash, to acquire other companies... And, the internet router business is still in its infancy... I thank Barrons for allowing me to buy CSCO at discount prices... : > It was in Nov 1997 that barron had come up with a very damaging article on stock market, I wrote a post DOW is a steal at 8000, I should have said Comp is a steal at 1700-1990 area, that it was, from that level they have been on the other side all along and I agree that as internet and wireless revolution shapes up we will see better growth rates, as for inflation if lower unemployment should have resulted in inflation it should have hit the economy in 1997-98 when we dropped from that proverbial 5% unemployment to 4.6%, now at 3.9%, the problem is that lower unemployment has reduced considerable poverty but the wealth remains in the hands of upper 10 percentile of the population,( 50% of rev is still collected from the top 10%) the ones whose life style is least dependent on market moves. For me we have very low unemployment associated with highly uneven distribution of wealth, the spending power in lower 40% of the population is restricted ,money velocity is low and will remain so. This leads to impact on the economy that is kind of mitigated, census workers and other low paying jobs skew the picture of lower unemployment but if you are not a construction worker lot of people are looking for work. The gap between industrial production and capacity utilisation still exists, the productivity is not fully accounted for, as present productivity figures cannot describe the 50% rev growth in CSCO nad other high fliers, we would see that from brink of a slow down to a rejuvenated strong economy we will have a lot more of these problems but I agree that these lower tests only will provide opportunities to traders who are able to treat market with some kind modle that respect these 'macro-economic cyclicals mis-interpretations', I would be lot more worried if we have a potential slow down that will take market far much lower, in a strong economic environment corrections are important and this divergence between DOW and Comp needed to close, I do concede that we can see some panic selling if PPI is not in line or retail sales are out of sync however I know one thing that what will lead these stocks are hte following news..eventually.. to play these stocks one needs a careful strategy to entry and exit and out of money calls, ,, that is what I am doing right now.. looking for that opportunity..but ofcourse not a good sight to see that core portfolio of last few years of CSCO MSFT has to suffer so much <<Tech stocks continued to be a four-letter word for investors today as the excesses in these issues continued to be washed away. What was left standing wasn?t pretty: the NASDAQ Composite dropped a bomb on investors to the tune of a 199-point, 5.6% crater, to close at 3385, as this indicator fell well below the key support area of 3500. The Dow whistled a similar tune, falling 165 points, or 1.6%, to 10371. For tech stocks, three issues combined to fuel today?s rout: Motorola (off $17.06 to $87.44), Intel (down $10.94 to $106) and IBM (off $5 to $104). Motorola headed south after Salomon Smith Barney analyst, Alex Cena, cut his 12-month price target by 40% to $120 a share from $200. Intel put a scare into shareholders when it said it will have to replace defective parts in as many as 1 million computer motherboards. IBM made it a clean sweep when Chairman Lou Gerstner confided that second-quarter results will be impacted by delays in unveiling new hard-disk drives.>> However the above matters to me little.. trading is the key for good performance and mitigate the loss in valuation of the core, that is what we try to do here.. <<According to one recently published forecast, the number of worldwide wireless users will grow to 1.3 billion by 2005 from 470 million at the end of 1999. Over that same time, shipments of handsets will rise to 900 million from 300 million. There have been some monster mergers announced recently. Vodafone (VOD) and Bell Atlantic (BEL) formed Verizon (while BEL gobbles up GTE too (GTE). WorldCom (WCOM) is buying Sprint (FON) and SBC (SBC) and BellSouth (BLS) are merging their wireless groups together. Earnings are good too. The Finnish firms Nokia (NOD) and Ericsson (ERICY)saw earnings doubling and tripling. All in all, the industry is looking very strong and these new lower prices are quite attractive. For those looking to place money in this sector for the next five years it should be hard to go wrong.>>