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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (78606)	6/13/2001 7:06:49 PM
From: A.L. Reagan	Respond to of 99985

NOK I bought because typically the market over-reacts on these warnings. Spirit, I've found that's not necessarily true and that many times the warning is the first of other shoes to drop. Perhaps a parallel is Nortel, when it warned months ago and dropped like a rock in one day from ~$30 to ~$20. I took the hickey and bailed @ $20. Glad I did, there was no bounce from $20 and NT's just slip slided away since. Or classic serial-warner's like LU was last year. I agree with your theory when you can ascertain that fundamentally the market has overreacted, as is the case with some bonehead analyst call, or a press report that doesn't quite have the facts straight, or the "Company X sucks, therefore sell Company Y" which sometimes makes sense and sometimes doesn't. Personally, I've learned the hard way to try to differentiate between mindless dip buying versus mindless market trashing. In the case of NOK, I do not believe the market's reaction was mindless. JMHO.

To: American Spirit who wrote (78606)	6/14/2001 9:34:10 AM
From: eichler	Read Replies (2) \| Respond to of 99985

A.S., Actually, it is a well-known if not successful strategy to fade the crowd. Buying when the herd is selling, selling when the herd is buying. Timing, however might be a mighty consideration. Oversold can get more oversold. Sometimes, the herd stampedes and price can tumble more than expected. I'm not saying the market will crash on you here and now, only that while what you did yesterday may prove "smart", it may also relegate you to the position of "bag-holder" for a time. Hopefully, your "american spirit" optimism won't backfire on you here. <Don't see much downside> But, as you don't use charts, how would you "see" the downside from here anyway? Regards, Eichler