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.

Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (50426)	3/18/2001 5:00:08 PM
From: Mark Adams	Read Replies (2) \| Respond to of 94695

The bad; Plunging equity markets not only failed to benefit gold but actually hurt it. Spot bullion lost $14 to end the week at $258.75 an ounce amid worries that eroding wealth will curb demand. interactive.wsj.com Theodosopoulos thinks Cisco could take writeoffs in the current quarter related to its bulging inventories and its $1 billion of lease receivables with customers. Cisco's 10-Q filed last week showed that its raw materials inventory ballooned to $941 million on January 27 from $145 million six months earlier. interactive.wsj.com The ugly; Perhaps the sagest piece of advice came from Jack Hersch, a partner at Cypress Management, a San Francisco hedge fund specializing in distressed securities. "It's not the bottom if everyone's still looking for the bottom," he contends. "The bottoming process could take years." The good; But at least one former bear has turned into a bull. Byron Wien, chief U.S. investment strategist at Morgan Stanley Dean Witter, believes that "the S&P 500, which was about 40% overvalued a year ago is now about 10% undervalued." Wien uses a model that looks at earnings, interest rates and risk premiums. In recent months, interest rates have fallen along with stock prices. Interest rates may be headed lower still, as the Federal Reserve is expected to cut the fed-funds rate by at least one-half percentage point when it meets this week. "It's too late to sell most stocks, and it's not too early to buy some," says Wien, who believes the U.S. economy is in recession. He favors certain Old Economy stocks, energy companies and even some beaten-down tech names. interactive.wsj.com It's different this time? One thing that isn't likely, according to Salomon Smith Barney economist Steven Wieting: a 1929-like cataclysm. In a recent report, he observes that, later in the 20th century, volatility in the economy decreased. When recessions are less frequent and severe, investors tend to assume earnings eventually will be higher. "If there is little reason to fear a Great Depression-era economic performance," he writes, "then there is also little reason to fear a Great Depression-era stock-market performance." interactive.wsj.com