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

To: Rick Storm who wrote (4203)	3/26/2001 6:11:09 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 52237

re: how I intend to buy: I was 70% cash for from January to June 2000. Then, I got back into stocks, and got hurt badly. I had thought we would get a soft landing, and I was seeing some stocks I thought were at reasonable levels. I was wrong. I was too optimistic. In January, I decided we were looking at a recession in 2001. At best, it will be like 1990. At worst, it could be as bad as 1973-4. That recession has not yet started, as we haven't yet had a quarter of negative GDP growth. Given that, I abandoned LTB&H, and started selling all the rallies, and buying very cautiously on quality stocks, when the bad news is out, and whose charts look like they might be forming a firm bottom. None of the stocks on my list meet all those criteria yet. I think, right now, the risk is getting in too early. I would rather give up the first move off the bottoms, if that's what I have to do to make sure the bottom really is in. The risk now, is that we have several January-type false rallies, while the fundamentals continue to deteriorate into 2002, and after each rally the market goes on to new lows. I think there is still a lot of stocks that are pricing in the best possible near-term (= next 12 months) future. for instance, semi-equips are now pricing in the rosiest possible near-term future, IMO. All the bad news is nowhere near out, for the network equips. The storage stocks are still pricing in unrealistic expectations for sales growth in 2001. I'm worried that the 3G buildout is going to be stretched out due to financing problems, so I'll probably sell my QCOM if it rallies to 65 or 70. About the only sector I see that may have hit bottom yet, is the LD telcos. T, FON, WCOM may be sufficiently hated now, to be buys. Everywhere else, there is still too much hope, too much wishful thinking. Look at the numbers I posted recently on consumer sentiment. It's at 90 now, (down from a 50-year high of 112, set last year) . It goes into the 50s/60s during recessions. Lots of room there, for sentiment to get worse (and consumer demand to fall further, and market valuations to get further compressed). I'm having a hard time setting price targets, since forward earnings continue to get slashed, and demand continues to weaken. I think I'll probably end up waiting till the charts look better (on EMC, NTAP, TXN); till the stocks are pricing in a bleaker future (AMAT, QCOM); and till the bad news is all out (CSCO). All IMO, and I could easily be wrong (again).