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 : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: High-Tech East who wrote (41290)	2/17/2001 11:14:40 AM
From: uu	Read Replies (2) \| Respond to of 64865

Hi Ken, I read your comments and did get the feeling that you are not particularly optimistic about the US economy - or for that matter the world economy. And who can blame you for feeling that way. Even John Chambers of Cisco feels the same way as you do (See biz.yahoo.com ). Now here is a thought from someone who by nature is an optimist - eventhough this sometimes may have made him look as if he is in denial!! But ultimately things have worked out just fine. Consider this. The manufacturing segment of the US economy is definitely in a recessrion, and the FED knows about it. with the exception of a couple of old fools sitting on the FED board committee the rest of them lead by Alan Greenspan do realize that in order to avoid the spread of recession through the rest of the economy the have to cut interest rates aggressively. I believe another 1.25 to 1.5 basis point is in order as John Chambers of the world will increase the pressure on the FED to act sooner than later, and will come on our way by the end of April/May time frame. Energy prices are dropping, interest rates are dropping and now Bush's administration talking about not being in favor of a strong dollar, a tax cut of some sort is on its way retroactively, and on top of all these - and this is very important that most people seem to overlook - Companies have strong balance sheets. From Cisco, to Microsoft, and IBM to Sun, to LSI and other semi conductor companies (that are the backbone of the new economy), they all have a lot of cash (thanks to the past 10 years of prosperity) on their balance sheet with little debt. And sure there are still companies that can be excluded from this (including Lucent) but the majority of fortune 500 companies do have strong balance sheets. Furthermore, unemployment is still ver low (i.e. people are working and still contibuting to their retirement investment plans throguh avenues such as 401K), and there is a lot of cash - in fact the largest since 1990 - sitting in money market accounts and on the sideline. You consider all these and we have the best ingrediants for the start of the perhaps biggest bull market of all ever! Now the question is when would this next bull market begin? I submit that we are in that market and this is just a blip that represents perhaps the best buying opportunity since 1991 - and perhaps for this century. I do strongly believe the earnings and revenue growth will be visible beginning Q1 2002, however the market will start realizing this after Q2 2001 and therefore the rally in the stock market will begin early to mid summer of 2001 (if not sooner). So while the trend and fashion of the day is to be pessimistic and throwing the towel, I for one am going against this absolutely idiotic and overdone trend. And yes I am in some instances paying dearly for it as well (e.g. buying Nortel at $31.5 just 3 hours before they warned!). But I believe next year at this time I will be smiling big time. Remember markets are driven 90% by emotion and 10% by fundamentals in the short term. However the 10% always rules and always overcomes the emotion. Right now is similar to what was happening a year ago at this time when practically everyday markets were going up by 100 points. People were calling for Nasdaq reaching 10,000 in no time. And now it is just the opposite. People are calling for Nasdaq 1000! And consider this, in 1994 there was a much smaller company called Sun Microsystems whose shares no one cared about. In 1996 people were actually so negative on Sun a lot of people tried very hard to imply the notion that it would soon file for bankruptcy and go out of business (and if you dont believe me just go back to this thread and read posts of many and most notably our good friend twister who were basically implying that). And a lot of people becuase of their emotional tendency did not care much about SUNW. And of course we know now what happened! Fear is short lived, but things always - and I mean always - move forward for the better. And the economy is of no difference. People make up the economy and I do believe in people and things moving forward for the better. So while you may have good reasons to be a pessimist now and believe in the camp that says the world is coming to an end soon, think about fundamentals and the realities behind all the fear and gloom and doom noise that you hear today everywhere you turn. Use the fear now to gain from market's greed a year from now. And remember short term investment strategies may make you money but they are all in cents compare to longer term strategies that ultimately are in dollars! Warmest Regards, - Addi