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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Robert Rose who wrote (333)	5/19/2000 2:00:00 PM
From: Bill Harmond	Read Replies (1) \| Respond to of 57684

>the operative issue now is asset allocation. I don't follow. I think the only reasonable long-term choice here is to be long the new economy leaders, but not leveraged in case of extremes. Sooner or later the economy will slow, interest rates will recede, and PEG's will expand again. When has it not happened? The productivity payback proposition for technology is too compelling. These companies will grow right thru this. Look at it this way: A 66% decline over a year in a company's stock that is growing 200% is a 90% decline in price. If you're betting on a recession in the US, then you need evidence of bloated inventories. There is none.

To: Robert Rose who wrote (333)	5/19/2000 2:13:00 PM
From: 16yearcycle	Read Replies (3) \| Respond to of 57684

Robert, I don't want to get too silly with this but there is NO such thing as a short term investor. You are either a trader, someone who buys a stock because he thinks it will go up for whatever reason he chooses, or you are an investor. An investor has a time line of years if not decades or forever. The investor believes that he or she has purchased a piece of a business that is presently undervalued and that value will some day be recognized OR he believes that the company will grow at some rate and eventually be worth much much more than the purchase price, and this difference is bound to be manifested at some point by a higher stock price. The difference may be subtle, but the investor looks more to the business itself, and has a less certain timeline. The differences do become obvious when one considers the use of options. If one reviews the history of the wealthy in our country, it becomes very clear that trading must not work as well as investing. It's quite lopsided and I am laughing a bit while I type this, knowing very well that the average si person disagrees with me and thinks buy and hold is for fools. I'll do it my way. I admit i forget sometimes, and that is the real problem: getting sucked into hyperactivity. As Buffett says, time is the friend of the wonderful business and the enemy of the business with poor fundamentals. At times like this, a mid day movie would be wise. As far as asset allocation, i may be a pretty patient buy and hold guy, but I have been on margin almost continuously since 1988, so I am the wrong guy to ask. We all have our problems.