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

To: Rande Is who wrote (44830)	1/6/2001 1:15:53 PM
From: Wendisman	Read Replies (1) \| Respond to of 57584

Rande & all....it would appear that the general concesus here is that 2001 will be a "picker's" market....finding those companies that will succeed in 2001 amidst all of the market trends is no easy task. My portfolios have been beaten pretty soundly in the past months....enough to drive any law abiding general contractor into smashing his fingers with his hammer or cutting them off with his saw. But I like the market and what investing has to offer in the long-term, so I decided to save my fingers and stay focused on the task at hand. Finding a few "winners" for 2001. One company that I have followed for some time (thankfully making a little $ along the way) is ITRU....I've posted recently that I like them, but I figured it was time to make a rudimentary presentation about them. InterTrust Technologies is Digital Rights Management software company - intertrust.com While e-commerce has become a four-letter word, my belief is that e-commerce will not disappear from the internet world, but rather take on different forms as it grows....the demise of hundreds of dot-coms is akin to the weeding of my wife's garden, so I don't see the entire e-commerce concept as faulty, merely the bloated excess of many of its branches. The whole Napster affair has brought about awareness of the "importance" of rights protections....big business wants to remain big business....and with the proliferation of digital devices coming (as in this article link provided by someone here at HOME)-http://www.ce.org/newsroom/newsloader.asp?newsfile=7058 rights management will play a large part in the viability and profitability of portable devices. For a good understanding of DRM, I found a company that provides a diversity of services in this arena - reciprocal.com It would be worthwhile/educational to read through many of their links....that way, I don't waste anyone's time by trying to regurgitate information better explained elsewhere. Also, it would be worthwhile to read through Microsoft's offerings for more DRM info: microsoft.com Microsoft also provides DRM software, in the form of its Windows Media Rights Manager....and one thought I've had is that Microsoft can bundle its software into other packages and essentially give it away for free....Netscape knows something about this <g>....but Microsoft obviously didn't fare well politically for this method, so it would seem that InterTrust may survive this tactic. However, I don't know enough to say which product is "better." So, it would seem right to look at the alliances and partnerships being made. Here is a list of ITRU's in the portable player arena: biz.yahoo.com Also, here is their PR with Adobe: biz.yahoo.com So you have the likes of Compaq, Adobe, BMG....one thing I haven't answered yet is how MSFT and ITRU can both have relationships in the portable player arena with the same companies (compaq IPAQ 01/04/01 release as an example): microsoft.com webnoize.com Unless the software is able to integrate, or at least share space, or did Compaq switch to ITRU, or.... The difficulty, as usual, is finding the revenue streams....the Napster issues are still not fully resolved. But, IMO the music rights issues are just the tip of the DRM iceburg.... ITRU has relationships with AOL (and eventually TWX) and Blockbuster, Philips, etc. for video, publishing: intertrust.com as well as further DRM video through its acquisition of Passedge from INTC: biz.yahoo.com ITRU is developing DRM solutions for the healthcare industry as well: biz.yahoo.com The list of relationships seems endless, however reveneue speaks volumes these days....I'm researching those avenues, but I believe the potential is there. And that is the key - potential. For a stock at these levels, I'll take the risk.... There are many more things to be said about ITRU, but presentations have never been my strong suit. Disclaimer: I have a good sized position established the first week of January '01 when ITRU was in the 3's....this was at the time that the MIT professor on CNBC-zure presented DRM as a cutting-edge technology (but I promise I didn't use his testimony as impetus to begin an investment). As always, do your own DD. And, opinions appreciated. Wes

To: Rande Is who wrote (44830)	1/6/2001 3:29:18 PM
From: Ross Reller	Respond to of 57584

Rande: more evidence to support your position: It’s A Lesson Of History: Don’t Fight The Fed But there are exceptions to rule that stocks shoot up when rates go down By Ken Hoover Investor's Business Daily It’s hard to imagine anything better to wake up a sleepy stock market than a surprise cut in interest rates. Or two. Money managers know from experience that interest rates are the main engines that drive the stock market. "My firm belief is the Fed is in charge," said Fritz Meyer, who runs $200 million Invesco Growth & Income Fund. "When the Fed wants the economy to rally, it can make it happen. Stocks discount upturns or downturns in the economy or in earnings." Declining rates help the market because fixed-income instruments, like bonds or money market funds, compete with stocks for investors’ money. When rates drop, investors look elsewhere for better returns. More important, declining rates spur economic growth by making credit easier for consumers and businesses. That’s mainly what the Federal Reserve had in mind Wednesday when it cut the fed funds rate from 6.5% to 6% and the discount rate from 6% to 5.75%. Then the next day, it lowered the discount rate to 5.5%. It’s also what investors realized the instant the Fed announcement hit the wires Wednesday. They sent the market soaring — for one day. Faster economic growth brings bigger earnings increases and higher stock prices. But does this rally have legs? Friday’s market slump makes investors wonder. IBD looked at every instance the past 40 years when the Fed cut the discount rate for the first time after a round of rate increases. There were eight times before Wednesday. And in every case but two, the market had already come off a bottom and was rallying. A bull market continued for months or even a few years. One exception was June 10, 1960. The Fed trimmed from 4% to 3.65%. The S&P 500 dropped another 9.95% through Oct. 25 before a powerful rally began. By then, the Fed had cut three more times, to 3%. The other exception was Nov. 2, 1981, when the Fed cut the discount rate from 14% to 13%. The Fed had declared war on inflation and jacked interest rates up to record levels. The country was in recession and the middle of a bear market. The S&P 500 fell another 17.54% until Aug. 12, 1982. But there’s a catch: The Fed waffled in its resolve to get the economy moving. It raised the fed funds rate while lowering the discount rate. Four days off the Aug. 12 bottom, the Fed pared the discount rate for the fifth time, from 11% to 10.5%. That did it. The market took off like a rocket. The S&P 500 was up 20.2% by Sept. 15. The impressive run-up lasted another 10 months. Tim Hayes of Ned Davis Research studied every rate cut since the Federal Reserve system started in 1913. He used the discount rate until 1989. Then he used the fed funds rate. There were 21 first-time rate cuts, by his count. The Dow Jones industrials were up an average of 19.92% a year later. Rate cuts are like expensive pieces of chocolate to the Fed: It can’t stop with one. In 17 of those 21 instances, the Fed lowered rates a second time, and in 12 instances a third time. It keeps dropping rates until the economy improves. Hayes’ research shows the biggest impact comes after the second cut. The market was up an average 28.4% a year after a second cut. Stocks keep rising on the third or subsequent rate cuts by lesser amounts. When economic activity starts to fan inflation fears again, the market advance peters out. By then, investors are looking ahead to rate increases. There are exceptions to the rule, Hayes notes. "There is the exceptional situation where the rate was cut early in a recession. The market didn’t react well," he said. That was the case in 1960 and 1981. It was also the case in 1929 and 1957. Hayes also looked at periods after the Fed dropped the rates once and then again after it cut twice. Out of the 21 previous occasions, in only four did the Dow keep declining until the second cut was made. In every case but one, the Dow rallied, usually powerfully, after the second cut. The striking exception was an initial discount rate cut on Nov. 4, 1929, right after the crash. The Dow lost another 11.2% until the second cut nine days later. The Dow rallied until April 1930, then tanked massively. The Fed started another round of cuts on Feb. 26, 1932. The Dow dropped 45.4% before a second cut on June 24. That did it. The Dow was up 113.4% a year later, according to Hayes’ research. There’s a caveat to all this research. Just because the Dow is up a year after a rate increase doesn’t mean it’s easy to make money. Many investors remember 1989. The Fed dropped the fed funds rate for the first time on June 6 of that year and again on July 6. But on Friday, Oct. 13, the Dow fell 190.58 points, or 6.9%. It rallied back until the end of the year, then suffered a nasty 9.5% correction during January 1990. Then the market clawed its way upward until July when Saddam Hussein invaded Kuwait. That sent the market into a tailspin.

To: Rande Is who wrote (44830)	1/6/2001 11:54:00 PM
From: Softechie	Read Replies (1) \| Respond to of 57584

That's another reason I've turned more bullish than normally You mean 2X or 4X bullish? The lower Nasdaq goes the more bullish you get? How about when S&P and DJIA tank...then what?

To: Rande Is who wrote (44830)	1/7/2001 7:10:01 PM
From: DlphcOracl	Read Replies (6) \| Respond to of 57584

Is there anything wrong with my thinking? With NASDAQ at 2400, possibly retesting recent low of 2280 this week with more earnings warnings and misses, it seems as if this is the perfect time to start buying the NASDAQ QQQ Index. My thinking is as follows: (1) we are ten months into the technology bear market; in the absence of rampant inflation or unsettling international events, bear markets rarely last more than one year; (2) NASDAQ is already 55% off of its March high, a decline comparable to 1973-74 (when inflation was rampant and oil prices were sky-high); (3)Alan Greenspan and the Fed have signaled their intention to aggressively cut rates in an attempt to prevent recession (or at least minimize it). Since the next support level for the NASDAQ is 2100, if NASDAQ drops to 2300 again the downside risk is 10%. However, looking ahead one year, I do not think it is a stretch to see the NASDAQ at 3400-3500 in early 2002 after AG and the Fed reduce rates and add liquidity to the economy. That is a 60% gain in 12 months if this plays out. At first blush, it seems as if the risk/reward ratio for buying the QQQ's as a LT investment is a no-brainer. However, this seems too easy and there must be some flaws in my reasoning. Is there anything wrong with my thinking? Any opinions or comments from the thread would be appreciated.