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 : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: TWICK who wrote (51745)	5/28/2001 11:44:27 PM
From: American Spirit	Respond to of 57584

I just got back from Europe and can tell you tech is booming over there. Internet expanding by leaps and bounds. Long lines at some cell phone stores. In the US and all over the world the Y Generation is turning out to be the largest new group of wireless and internet users. Already 50% of the kids have internet and cel phones but it's projected to be 90% within a few years. DSL is a must now. Who wants slow service anymore? Handset growth will continue globally. New software systems will continue to flourish as upgrades become mandatory to stay competitive. Storage is also mandatory. While hardware prices have come way down and you can't make much money selling boxes themselves anymore, the rest of the entire sector seems to have a solid base beneath it and plenty of opportunities for rapid growth ahead. AOL, VZ have gotten away with price hikes and expect YHOO to figure out how to charge for more services. This 2-3 quarter slowdown may just be a digestion, consolidation period following an irrational run-up in internet stocks. Therefore, I consider the bad news priced in and I would be a buyer on any pessimism dips in tech stocks. I am also interested in likely takeover candidates. Expect plenty of such deals to be closed this year while many stocks are so cheap and companies wounded. And pay attention to beaten-down stocks of companies with lotsa cash and no debt vs. market caps. I am mostly cash now after making 50% in April-May but hope there is selling now in order to pick up some compelling buys on dips including an oil stock or two. It amazes me that gas it at its highest price now yet some oil companies still have PE's under 10. Additionally, the Fed will continue to drop rates. That alone will stop any great waves of bearishness. With interest rates so low investment monies must go somewhere and most of it will continue to go into stocks, and tech stocks for those with aggressive goals in mind. That said, I am sure there are overvalued stocks out there right now after the recent rallies and I would just stay away from them. CSCO above $20 for instance does not interest me unless I were investing for the very long term. However it's also a risky short as CSCO does have the potential to ramp back up its growth in 2-3 quarters and it could double within a year. Be aware we are in a cooling off phase (call it a recession if you like) but we are still in the midst of a longterm tech revolution which will reward surviving smaller companies and dominant larger companies for years to come. The argument that tech PE's are too high may be true in certain cases but PE's themselves are out of whack now as short-term earnings stoppage has bloated them. Better to look at market caps minus cash/debt/assets plus brand name value, niche domination, lowered burn rate and revenue cashflow. This way of looking at stocks will lead you to true values which may appear to be overvalued but are really undervalued. A lot of what we might do as investors depends on willingness to place bets, trade short-term or on how aggressive or conservative we want to be. Other than that, anyone who wants to make money still needs to be in the market. Just pay attention and know when to cash out as well. Volatility is a trader's friend so you can play ranges for scalps. Buying dips and selling rallies. Just remember to have perspective. We just had the largest fastest drop in the market in recent memory, esp in techs. And some stocks like IBM and VZ neither took part in the rallies nor were affected by the sell-off. So "the market" isn't just one thing it's many-many types of stocks which perform differently. I know everyone is expecting a tech sell-off in the summer but the market usually surprizes us and that's what it might do again. I wouldn't be surprized to be surprized again.