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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: John Trader who wrote (48068)	6/18/2001 1:50:11 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

OT re LTB&H, and selling strategies: RE: when I'll go back to LTB&H: I think, at worst, we are in for a cyclical (6-18 month-long) economic downturn, not a secular (20-year-long) downturn. I don't see the U.S. today with the structural problems of Japan, or the protectionism (and resultant collapse of world trade) that turned the 1929 cyclical decline into a secular decline. In addition, I think we may (just may) be in sight of a bottom in the Nas. Reasons: 1. I keep on expecting inflation to go over 4%, and it hasn't. YOY overall inflation has been just below 4%, which I consider a critical threshhold, for almost a year now. 2. The Fed has just said they see no inflation risk. Their assessment is likely to be more accurate than mine, and their opinion matters (even if they are wrong). That is, they have signaled a willingness to lower interest rates further, to whatever extent necessary to prevent a recession. This puts a floor under the stock market. 3. I also keep expecting consumer spending and confidence to decline sharply, and that isn't happening either. Events so far haven't caused the generalized fear among consumers, that would turn the downturn in business spending into a recession. If what's happened in the last year hasn't caused it, what could? Amazing resilience, an amazing durability in optimism, among Americans. 4. Stocks have been ignoring bad news, a lot of charts look like bottoming formations. The continuing avalanche of bad news is causing fewer and fewer new lows in stocks. So, if the Nas retests its April lows, I will be back to where I was then, 100% long the market. Currently buying, in increments, EMC and WCOM. Will go long on TXN and QCOM on further weakness. Still holding a large position in TXN and NVLS put LEAPs. Then, on the subsequent rebound, I'll have to decide whether to keep selling the rallies. So far this year, that has been a very profitable thing to do. Instead of selling all on the next rally, I may only sell half. RE: selling strategy: Yes, this is even harder than sticking to a buying strategy. Mine are: never hold at a P/S over 10 or a P/E over 100, sell at the top of the 5-year P/E and/or P/S range, sell at a PEG over 3. Of course, if you do a good enough job on buying (the right stocks at the right prices), then you don't need a selling strategy. I'm greedy, so I keep rotating from overvalued to undervalued.