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

To: American Spirit who wrote (79984)	7/11/2001 1:14:57 PM
From: t2	Read Replies (2) \| Respond to of 99985

Who said I'm optimistic? I just wouldn't sell now. Or short. Thanks for the clarification. Basically, us longer term bulls seemed to have thrown in the towel for a short term recovery in the market. I am doing the same as you..just holding positions....not willing to short the Nasdaq at current levels even if I believe there is potential for certain stocks to go lower, such as JNPR. Any bounce will probably pull these types of names higher as well, and probably significantly, since there is also a lot of short interest in this name. I will probably short it when and if it bounces. QLGC is another name that I would compare to JNPR. Should have thought about that one earlier. It had only occured to me after reading Zeev and bobby_beara's discussion yesterday. Again, only willing to short these when and if there is a significant Nasdaq rebound. I have no desire to sell my main holdings but these companies do have earnings and a reasonable PE. I don't have any cable stocks..or baby bells but these look to be benefitting from the CLEC disasters and the telecom equipment price competition. Looking for good entry points in some of these..except the long distance carriers.

To: American Spirit who wrote (79984)	7/11/2001 1:20:20 PM
From: David W. Taylor	Read Replies (3) \| Respond to of 99985

>> Down 5 days in a row. When it is overdone? >> Simple stuff really. We had a bubble. We got to a place where everything was insanely overvalued. We need to do the opposite to burst the bubble. We need to get to insanely undervalued. Since we are still at roughly double the long term average P/E, we are still overvalued. There is an argument now that we are no longer insanely overvalued. We need to see the pendulum reverse until all of the stocks out there, that have survived, are so cheap that you would have to be insane not to buy them. This will only happen when sentiment switches from wild euphoria through euphoria through sanity through aversion through extreme aversion to insane aversion. Currently I am seeing the beginnings of doubt in the mind of the average investor. To me this equates to the transition from euphoria through sanity. That leaves at least three more transitions to get through before the market is a screaming buy. By the way, you can only value stocks on their fundamentals. Any measure that simple says that the actual share price looks cheap without doing any math is sheer laziness. I will probably jump in too quickly along with everyone else. It is a common fault to think that we have got to a certain place, when anyone standing further back can see that we are still miles away. When IBM gets to $40, MSFT to $20 and EMC to $7, then we will be insanely undervalued. At that time, the "analysts" on BubbleVision will be calling for further falls and the cheerleaders will already have been downsized. When will this happen? My guess is that we are still two or even three years from then. Wait for headlines that say: "CNBC anchor jailed for fraud." and "Merril Lynch analyst killed by despondent investor." When you see that level of disgust with the stock market, that will be the famous "bottom" and time to load up the truck.