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Strategies & Market Trends : WR's Momentum Trades -- Ignore unavailable to you. Want to Upgrade?

To: Bernard Ng who wrote (9332)	2/7/2001 8:28:51 AM
From: ChrisJP	Read Replies (1) \| Respond to of 11130

Hi Bernard, Yes when the NASDAQ began overbought and had a SAR hit (sell signal), looks like the climate improved for shorting. Highflying fiber optic and network stocks need to return to respectable valuations. For CSCO, a PE of 30:1 on forward looking earnings, that means $20 - $25. You can probably guess what that means for the rest of the NASDAQ. Fortunately, many Internet, PC hardware, and PC software stocks have already returned to these kind of PEs, so that should prevent the NASDAQ from going to zero. But here's the real deal: Its gonna take a while for the excess inventory, debts, etc. to work their way out of the system. IMO, rate cuts won't speed up this process much, they will just make it less painful. You should go back and look at charts from 1928 - 1933 and 1972 - 1974 to see what I'm talking about. There's no way to compare now to then, cuz we just experienced a 1929 mania (IMO larger), but with 1980s/1990s safety nets/policies in place. So being short will be great for a few months, but pretty soon we will enter a phase where neither momentum shorts or longs will make money. Sure there will be mini-rallies and mini crashes. But in general, they will be trading range events and it will be tough to make easy money either way. The natural result of this will be a decline in volume. That will cause the scalpers to look for other ways to earn a living. See the trend emerging ? Maybe by Nov 2001 we will slowly begin to head up again for real. Now look at the bigger picture: Starting around 2003 - 2004, the amount of money the baby boomer generation will redeeming to pay for college tuitions will start to equal what they're saving for retirement. By 2008, virtually all baby boomers will be either be paying for college educations or shifting their portfolios to more conservative financial instruments in preparation for retirement. Compare that with 1995 - 2000 when virutally all baby boomers were saving for college educations and for retirement. Good thing for you the OTCBB operates in its own little world, isn't it ? <g> So much for the 7 year prediction , GO MAKE SOME MONEY TODAY !!! Chris