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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: pbull who wrote (52705)	6/27/2001 8:54:20 AM
From: Rande Is	Read Replies (4) \| Respond to of 57584

do you believe the analysts, and by extension the media, are pushing a "the sky is falling" mentality onto the public? I believe analysts and by extension the media are pushing whatever suits their particular near-term needs. . . and currently that means hyping the gloom and doom scenario. I especially liked the way Moody's lowered their credit rating on EXDS yesterday, one day after it began to squeeze short-sellers. With the number of short shares in that one, it could have squeezed all the way back to double digits in a very short time, giving long-term short-sellers and hedge fund managers an M.I. So hedge funds NEEDED Moodys. What I don't believe in is coincidence on Wall Street. Especially when the timing is so perfect. You have to look at things from the eyes of a hedge fund manager at a time like this. . . and always ask qui bono [to whom does it benefit]. When the tech market was at its most inflated, analysts were continuously upgrading, the media was euphoric, and it seemed that every person interviewed was telling the public that they "needed to be in this market". No sooner many of them got into that market, they became bagholders. Yet all the way down, the analysts continued pumping their trash [remember Meeker and Blodgett?], which has now attracted the investigating eye of congress. And virtually nobody was saying, "the sky is falling" back then. [unless you were here at HOME]. So the markets try to put in a bottom. . . or if you believe the current hype. . . "will break through the April 4th bottom and continue on" . . . . to theoretical zero, I guess. .>smirk< . . . and since most of the street is still short, don't count on seeing upgrades until we get an official turn. . . .regardless of the ACTUAL condition of tech stocks. Regarding the actual condition of tech stocks, the recent rash of lowered expectations were brought on by the U.S. self-inflicted tech-recession, caused by trigger happy CEOs. Remember this recession occurred inside a U.S. vacuum. It never did spread worldwide. I believe the tech market as a whole will begin to heat up with the October earnings and by the January earnings will begin to show extraordinary strength once again. [Not to overlook the brief summer rally I expect to see the first half of July. . as earnings come in not as bad as expected.] So the question you are asking is, "is the sky falling?" Will the recession worsen, sending us into a global economic meltdown? No, I do not believe it will. . . not with the FED lowering interest rates as sharply as they have. . . and no, not with productivity remaining strong and the GDP as strong and steady as it has been. "Will the recession spread throughout the world?" Again, a phantom recession does not spread. And what about those pumping gloom and doom? Obviously they have something to sell you. Or should I say, they don't want the markets to recover until they have fully covered all their short positions and they are simply not ready to do that yet. Once more, everyone is waiting for a full re-test of the April 4 lows before they cover and let the markets run. And in my opinion, we could stage an intraday retest to 1800 or so over any 2 trading day period with the Nasdaq under 2100. OK, let's look at all of this from another perspective. Are there ZERO tech stocks with bright futures? Are there none that are still experiencing strong growth, while showing earnings? Do NO tech stocks offer hope for a better tomorrow? If you believe this, then you believe the markets SHOULD continue lower. But if you think that the lack of upgrades is part of the smokescreen being staged by the Wall Street Insiders, then you need to be there to buy those bottoms when they are finally hit [as in the retest]. Personally, I believe that tech stocks were overvalued for a time and needed to correct. . . nothing more. A PE of 25 is now average for S&P stocks. High growth stocks deserve to enjoy fairly generous valuations above that. . . and are often measured through revenue growth, earnings growth, etc. And I think that the current valuations are fair. Yes, some are still high, but deservedly so. So in my book, [and according to my subjective/technical read], the market is ready to move higher after the re-test. . . .[ignoring the same ills we ignored prior to 1999] What we have been seeing is a sort of Wash and Rinse of the retail investor. . . [up and down]. What Wall Street does NOT want is the small investor jumping on the bargains and buying them up like beanie babies. That would be dreadful. So they "allow" the markets to show a bit of hope, then take it away. . . .then repeat the process until sufficient capitulation is achieved [measured by a complex formula of indicators]. . . . The confidence of the retail investor needs to be shaken, as indicated by their willingness to sell their holdings. . .before techs will be released to move higher. Finally, what you won't hear very often are analysts saying the economic indicators are not that bad, the economy is going to improve, earnings will begin to improve, we have the rate cuts kicking in during 2002, many techs are undervalued here, it is time to start bargain hunting. That sort of honesty is a rare commodity on Wall Street. Rande Is