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Strategies & Market Trends : Market Gems-Trading Strong Earnings Growth and Momentum -- Ignore unavailable to you. Want to Upgrade?

To: lee kramer who wrote (1688)	1/14/2001 2:33:30 PM
From: Jenna	Read Replies (4) \| Respond to of 6445

Heading Back Into Stage 1 not for the blimps, but for others slowly. Strategy for the week would be to short blimps like JNPR,BEAS, QLGC, JDSU,BRCM, BRCD, CIEN, NTIQ, AMCC, NTAP, that have no right to such high multiples without the earnings capabilities to back them up up. If anyone checked MRK's P/E ratio of 28 and compared it with INTC the writing is clearly on the wall MRK is growing its earnings by over 20% a year and sporting a comfortable P/E while INTC is questionable if it will it will earn more than 8 cents above the previous year 1999. How much worse will it be for other techs trading at 80 to 400 times their earnings? RMBS, ARBA were just small examples of what will more than likely go down as others report earnings. Its not even likely that high double digit growth companies (over 80 times earnings) will survive a price cut that will lower its multiple to more tolerable levels in the current harsh economic climate. We've said here on this thread beginning the end of September while the bubble was still intact and we continue to say that now. Analysts and money managers are, however belatedly, finally humming the same 'tune' and are singing the high multiple song even if a little late. (http://www.marketgems.com/atom_one.gif). With INTC reporting on Tuesday, it might beat the lowered expectation but if there is any sign of lowered guidance for next year, it might drop even more than its present price which is about 30 times earnings. How would that effect blimps trading 3 and 10 times that mulitple? Others are 80 to 400 times earnings! Ironically every nasdaq rallies propels the blimps higher which are making them more sitting ducks than before. Perhaps position trades can be taken judiciously on very battered companies like IWOV, TIBX, NUAN, CFLO, ELNT, TLGD, IDTI and ARTG for continued upside. But there will be plenty of shorting opportunities and folks will rebel, and rightly so, at high multiple bubble stocks. In this phase it would be advantageous to use fundamental analysis insofar as ultimately those companies that will fall way short of earnings will more than likely have a harder climb out of the abyss than others that have earnings surprises to the upside. In addition companies that have promise for upgrades, earnings revisions to the upside should be stressed and we will do just that in the next weeks. I think we should be looking for finer, quality companies that look they are in the stage 1 renewal of the cycle. Message 15180431 Conversely, we need to find areas that are looking to get into the stage 3 that might have money flowing out and into the 'new tech stocks' that are freshly corrected. I agree we have to find the sector and stock leaders of that sector that will be under DISTRIBUTION as the money flows back into the tech sector. JNPR ---> Sitting Duck 438.33 P/E with the upside in the last few days the P/E of JNPR as increased making it a likely target for the shorting block and the possible move up on Monday at least at the open, JNPR looks like a target for short play for this week along with its triple digit or even high double digit stocks that are reporting this week. Disclosure: I have already accumulated light positions the first and second week in in ELNT, TLGD, IDTI, NUAN for a position trade, the others so far are just played for the tradeable profit value.

To: lee kramer who wrote (1688)	1/15/2001 12:42:14 AM
From: Dave Gore	Respond to of 6445

Lee, more great analysis, the NAZ is a tale of two markets - the still overvalued and the undervalued gems. That is why a NAZ rise of 1,000 points may produce very different results in stocks like NTIQ, MANU, JNPR etc. versus KEM, LRCX, AMAT, or even MSFT, to name a few. You said: <Conclusion: Trade the stocks/sectors that are in the re-accumulation phase from the long side...trade the stocks/sectors in the mark-down phase from the short side.>