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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: JRI who wrote (2178)	3/7/2001 10:09:54 AM
From: Paul Shread	Respond to of 52237

SPX and COMPX are definitely being capped at their September downtrend lines. Message 15456514 As I said, I'll be adding to longs on any retest, which has a good chance of holding, IMHO. It's been 2 1/2 years since I've seen a buy list like this: CSCO, DELL, ORCL, SUNW, GLW. The only problem is the falling fundamentals; my MSFT buy target has dropped from 57 to 52, HWP target has dropped from 30 to 26, INTC 27 to 23... The list goes on.

To: JRI who wrote (2178)	3/7/2001 10:17:23 AM
From: JRI	Read Replies (6) \| Respond to of 52237

A thought for the thread: Today is a pretty amazing day....don't know for sure what the Yahoo news is...but is likely a warning... So, we got warnings in the last day from Yahoo, JDSU, and BRCM....These stocks were formerly the leaders of the new revolution: Yahoo (internet), JDSU (fiber optics), Broadcom (communications).. In the run-up in PEs in 99 and 00, tech fanatics (myself included) lived under the assumption that internet growth/optic/communication growth was unlimited.....50-100% growth rates for years was not unrealistic...and being the class of the group, these companies could exceed the average growth rate for the segment. Now, it is clear that the internet is subject to the same cyclical factors that effect all technology segments. It may remain high growth, but it is cyclical.....In 99-00, the market, obviously, did not price in this cyclically... Today, however, I think the news gets even worse....if you look at the warnings from BRCM, JDSU....not only are they looking for flat growth....they are actually looking for NEGATIVE sequential growth....that is nasty....Again, I don't know what Yahoo has to say, but it could easily join this group... So, now, instead of a group of stocks that can grow 50-100% for 5-10 years.....we have the expectation of 25% growth, with occasionally cyclical dips (in negative territory) that could even make that seem excessive....add on top of this the normal concerns about technology obsolescence, etc... It does seem logical, then, to look back to the period 1991-1994 as a better benchmark for valuations for these companies going forward vs. any PEs after 1995.....1991-1994 was mostly pre-liquidity pump, mostly pre-tech religion, and mostly pre-internet religion If we recaliber tech stocks back to the 1991-1994....this thing ain't over, and I don't see how 2071 holds...Adding insult to injury, it is also entirely logical to think any downside move (which we've been in) should equal- at the bottom- the hysteria that we saw at the top....that would mean that, potentially, tech could go to levels of "undervaluation"....before fundamentals and psychology create a solid bottom...I really don't like even thinking about that possibility! I know I'm not saying anything new here, but until the Yahoos, Broadcom's, and JDSUs can come out and prove that they are more than 25% or so growers with said cyclically....I don't see how we can argue for post 1995 P/Es either.. I'll welcome any tomatoes here.....just thinking out loud....