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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (25565)	5/30/2000 12:11:00 PM
From: StockHawk	Read Replies (1) \| Respond to of 54805

>>CNBC, and probably others, is now talking about a 1/4 point raise in June. I think that unlikely...we've seen no slowing in consumer spending of any great note<< The argument that we will only get a 1/4 point hike next time - or no hike at all - is based on evidence that the hikes already in are having the desired effect. Keep in mind that most agree that rate hikes take months, not days, to show an effect. So the recent half point is not even close to being in the numbers yet. Also, consider that slowdowns in "consumer spending" will first show up in big ticket items, and that is Exactly what we are seeing. Existing home sales took a bid hit in April, down 6.2%. That continued the trend of the past several months. True March was up, but that is likely because consumers heard about the impending 1/2 point hike and rushed to buy before it hit. Other big ticket items, such as boat sales, have also been dropping, and durable goods sales fell 6.4% in April. That is the largest decline since 1991. Auto sales are off and even every day consumer spending is starting to show evidence of a slowdown. Consider the statements by Costco and others last week, and the resulting hit to stock prices in the retail sector. Also, when viewing inflation, it is important to focus on the core rates. If not, then you are considering energy costs, which are largely influenced by an oil producer's cartel. Certainly Fed interest rate hikes will not have much effect on the cartel and the Fed knows that. Thus there is plenty of evidence that the past rates hikes have had an effect and the more recent rate hikes will compound that effect. It is going to be increasingly difficult for the Fed to "sell" futher rate hikes, especially in an election year. As for earnings, S&P 500 earnings were up an incredible 23% YOY this past quarter. StockHawk

To: chaz who wrote (25565)	5/30/2000 12:44:00 PM
From: mauser96	Read Replies (1) \| Respond to of 54805

beaten down beauties. Just because they are the most beaten down, it's not sure that they will rise the most once the market changes direction. Value for tech companies is, like beauty, in the eye of the beholder and hard to quantify. Nevertheless, those gorilla game stocks that are not down so far may actually be the best candidates for good gains once the market turns. Personally, I would look for companies that are actually in a tornado now. It's likely to be a while before the market gets optimistic enough to reward far future tornados. Examples of companies actually in a tornado would include NTAP and CREE. Have we reached the bottom? Who knows, but it's probably close enough to start some cautious dollar averaging. Confirmation of a bottom will require several big volume, big up days, with a high A/D ratio. The bottom will be obvious in retrospect but almost impossible to spot at the time.