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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: oaktownaj who wrote (40227)	11/5/2000 8:45:00 AM
From: Rande Is	Respond to of 57584

Thanks, AJ. You are correct that the 2nd and 3rd tier has remained lifeless. I think we will need to see absolute confirmation of a bull rally, before fund managers will get confident enough to herd into small and micro-caps once again. [Once bitten twice shy] But even more of a factor is the shyness of the Individual Investors. Even some of the most popular Cult Following Stocks are lying dormant on the floor. Many are waiting for Alan Greenspam himself to announce that it is "OK to buy again". . .which could still happen . . in the form of the FED taking a neutral stance on Interest Rates. And be careful of that day when the Individual Investors jump in with both feet. . . that the bottom isn't yanked out from underneath. I fully expect that day to be a trap like so many other important "entry points" we have seen this year. I suspect the pops on the small and micro-caps will be sudden and very steep [20-30%], as shorts cover long-term positions. But after the initial pop day, I don't expect too much from these right away. And after a fall of 75%, a 30% climb only represents 10% of the way back to full recovery!! Of course, certain stocks, [most of which we have already identified], should rise to the top. The cream always does. But the others will probably get stuck in the mud until some serious news comes along to rescue them. This is why I am far more focused on the larger cap plays these days, and not paying all that much attention to the smaller caps. I would hate to think I [or you] missed 3 or 4 weeks of strong upward movement in the large caps while waiting around for an "UNDERVALUED" microcap to get noticed. Ouch! Value is a funny thing. You can calculate it all you want. But in the end, it is completely dependent upon demand. Rande Is