Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: t2 who wrote (18334)	2/12/2001 5:19:44 PM
From: luther yow	Read Replies (2) \| Respond to of 24042

t2, I really wish I could say you are right but I have called a bottom every day for the last 10 trading days and all I have lost is most of my captial equity, the 52 week low is 37 and I'm not even sure that is the bottom with the endless selling every day. down 3% every day and like a fool I say to myself this can't go any lower and it does. Please, please let me know when the turn comes. At least zero is a lot closer than it used to be. Thanks Luther

To: t2 who wrote (18334)	2/12/2001 6:52:41 PM
From: Tunica Albuginea	Respond to of 24042

Don Luskin: Storm Sellers community.metamarkets.com February 12 2001 Trading Desk Diary Ahead of a crazy week, Don Luskin reminds us that what really matters is what everyone else thinks. Okay. It's getting crazy out there now. And it's not just the NASDAQ any more. After last week it feels like the bottom's falling out of the whole stock market. So before another crazy week gets started, let's stop for a minute and talk a little philosophy. We can go crazy and sell everything afterwards. A couple minutes won't make any difference. Stop and think. So what kind of game is the stock market, anyway? The best description of the stock market I've ever heard was made by the British economist John Maynard Keynes in 1936. He said stock market investors are like judges in a beauty contest. But the idea of this beauty contest is not to pick the prettiest girl, but rather to pick the girl that all other judges will think is the prettiest. This simple metaphor is profound because it reveals the truth that, for all our study of the economy and companies, it is subjective perception -- not objective reality -- that sets stock prices. And it's perplexing because, as Keynes pointed out (in 1936, eight years before Game Theory was born) that all the judges are fully aware of the true nature of the contest and act accordingly. Each judge knows that he's a player in a fabulously complex game of pysch and double-psych, an infinite regress of figuring out what the other guy is thinking you're thinking he's thinking you're thinking he's thinking, and so on and so on... So enough philosophy. What are you going to do this week? Sell everything? Whatever you do, don't forget about Keynes' contest. It's most important precisely at times like this, when -- truth be told -- no one knows what the hell is going to happen. Is Alan Greenspan going to cut rates again? Who knows? If he does, is it going to revive the economy? Who knows? If so, when? Who knows? Tax cuts? Earnings? Who knows...? It's as though some great fog machine has gone off, and the judges can't see the girls on the stage at all. There's no objective reality, at all. So the judges stare at each other in terror, searching each other's eyes for any clue at all about which way this thing's going to go. So we get Merrill's Henry Blodgett, perhaps the single least credible and most thoroughly discredited securities analyst in the already dark annals of securities analysis, inexplicably assigned to cover Microsoft, one of the most important technology companies in history. And this guy, who's managed to find a way to be positive on every reeking, bleeding dotcom implosion, comes out with a bunch of hackneyed, recycled George Gilder clichés about Microsoft's strategic challenges -- and the stock craters! People are actually influenced by this stuff! And not even because they believe it -- but because they're scared that if it gets repeated on CNBC enough times someone else might believe it... and so on and so on. And that's the kind of market we're in right now. It's the kind of market where all you can do is look inside yourself and decide what you believe. Because the objective reality has never been so indeterminate, and the subjective perceptions have never been so unstable. It seems obvious to say it, but at this point the NASDAQ is either going to make new lows or it won't. But that's profound because it will be momentous either way. We're either going to skate over the rim of a very deep hole here, or we're going to bounce back from all this pessimism like a superball. This is one of those make-your-year moments. Whether you act or whether you don't, this round is going to count. As the NASDAQ approaches the January 3 lows, and the rest of the markets follow, the easy thing to do is to capitulate -- or as we say on the trading desk, to ka-puke-ulate. Just stop the pain and the confusion by selling everything. Or sell all your tech stocks and put the money in consumer staples based on some valuation notion, probably -- but at this point it won't really be about value. At this point there's more traditional value in Intel than there is in Coca Cola. If you do it, it'll be because you can't stand to hold tech stocks anymore. And why not sell -- all the other judges in the beauty contest are doing it. All the analysts who who screamed "buy" a year ago are scrambling to maintain whatever shred of credibility is left to them by hollering "accumulate" now, which of course is their genteel code for "sell till your head caves in and your eyes roll up in the back of your skull." And all the pundits who, just one year ago, had learned the eternal truth that tech stocks could only go up, now have learned the really true eternal truth that techstocks can only go down. Go ahead. Reality didn't matter at the top. And it won't matter at the bottom, either. ============ Maria B. Salutes Don! community.metamarkets.com CNBC's Maria Bartiromo calls Don Luskin one of Wall Street's "Truth Tellers."