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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (879)	3/3/2001 12:09:52 AM
From: Gottfried	Respond to of 23153

energyplay, shorting AMAT: there are a few on the AMAT thread who are shorting near 50 while the stock is in the range. Be careful when it breaks out higher. This will happen around the time orders stop declining [some time this summer is my guess]. Earnings will be lower and PE higher, but the stock will rise in anticipation. If you had shorted AMAT in 1999 when PE was its highest, you would have lost. chart.bigcharts.com To see what's driving the AMAT cycle see the price vs orders chart here geocities.com Gottfried

To: energyplay who wrote (879)	3/3/2001 12:36:01 AM
From: Don England	Read Replies (1) \| Respond to of 23153

e.p., thanks, that pretty well answers my questions and makes me wonder even more about the idea of shorting these 3 particular stocks. the idea of shorting poor management has a certain harmony, but can you see g.e. missing by a lot? hmmmmm.... on the topic of brokers - does anyone, anywhere have a broker they actually find it easy to do biz with? i, thankfully, haven't gotten hit with the 'wait until the settlement date'. what a load of crap! msdw actually has let me buy in my ira when i didn't have enuf cash to cover, and then i have to send in the money in 5 days or they sell. they don't always allow this, and never for more than a couple hundred bucks. thanks, don

To: energyplay who wrote (879)	3/3/2001 6:46:17 AM
From: excardog	Read Replies (2) \| Respond to of 23153

ep <<I now tend to buy puts on stocks or indexes - limits my risk.>> How might you play the following? I think the chances of the DOW falling a couple thousand points over the next 6 months is pretty high. So in that vein I would like to play this in the least expensive most rewarding way (in case I'm wrong of course) More of a hedge if you will. Like way out of the money puts or something. I would appreciate yours or anyone else's thoughts on this. TIA Scott

To: energyplay who wrote (879)	3/3/2001 12:16:35 PM
From: Sharp_End_Of_Drill	Read Replies (2) \| Respond to of 23153

Energyplay & Don - energyplay beat me to the punch with the reply on rising PEs as earnings drop. I've watched a large number of posts lately say what a great deal XYZ company is because their PE is ... (generally some number less than 20). If this were a normal market, or even better a rising economy, that would be a great reason to buy a stock that otherwise looked good. However, as we all know the market tries to predict future earnings, and right now these companies all have falling earnings. I suspect things will turn out worse than expected, and many of these guys will see earnings go negative - then poof! - no more PE. The great earnings of the last two years were derived from what is tritely called a bubble. A more accurate term would be ponzi scheme. The internet IPOs, and tech borrowing & stock offerings in general, fleeced an amazing amount of money out of capital markets. The telecoms sold record amounts of bonds. All this was unsustainable long term, but short term that money found it's way into all manner of equipment maker earnings - thus the falsely inflated earnings leading to low PEs. We are witnessing this scheme fall apart, as bonds are getting much harder to sell, debt is at astronomical levels that cannot be paid back, and the capital market has slammed the door on anything tech. Earnings have only started to collapse, and will continue to do so. There just isn't the same amount of money out there to flow through these companies to their bottom lines. What we haven't seen yet, but will soon, is fierce competition as a supply constrained market changes to a demand constrained one. Cost cutting to grab or maintain market share is going to slaughter earnings, and these PEs will rise and probably vanish. In such a market I believe it's best to try to identify companies with low debt, high capitalization, and quality management and products. These are the guys who will survive, and companies that don't meet those criteria will probably go the way of the dinosaur. Consolidation usually happens in such situations, but not at prices you would be happy with. I'd suggest anybody be very wary about what previous high fliers they buy, and be prepared for drops far worse than expected. I've seen it happen in computer companies and networkers in the early 90's, to energy companies several times in the 90's, steel and car companies for the last 30 years, and I believe history will replay soon - as it has an annoying habit of doing. I'm happy to try to play the short side until blood is flowing freely in the streets. Then I'll look to buy the ones capable of surviving and even prospering at the expense of their weaker competitors. Long live capitalism. Sharp