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 : Guidance and Visibility -- Ignore unavailable to you. Want to Upgrade?

To: ChrisJP who wrote (10465)	8/12/2001 12:18:17 PM
From: SusieQ1065	Read Replies (2) \| Respond to of 208838

Hi Chris...I like this comment from the Pristine Newsletter regarding the myth that the stock market always recovers .... After all, investors have been told that the market always goes up eventually, and in the last 60 years this has been true. I don't want to break up the party, but one of the reasons the market always goes up is simply because profitable companies are shuffled into the stock indices and unprofitable companies are shuffled out. Can you imagine what would happen to the index averages if steel, railroad, and buggy whip companies were still included in the Dow? If you insist on being a buy-and-hold investor, it's a whole lot easier to just dollar average into the indices. As long as the charts don't look like the Nikkei after five years, you should end up in pretty good shape by the time you're ready to retire. Market Commentary It appears to me that in the short-term, all of the indicators --- technical, fundamental, psychological, and economic --- are pointing south. At best, we'll remain in a trading range for a while, at least until the market can shake off some of the bad news that appears to be hitting us from all directions. At this point, most investors and many fund managers have passed on the chance to buy technology stocks, even at their current depressed levels. Fortunately for the stock market, although no one is buying, investors aren't panic selling, and are faithfully sticking to the strategy that brought them to the party. After all, investors have been told that the market always goes up eventually, and in the last 60 years this has been true. I don't want to break up the party, but one of the reasons the market always goes up is simply because profitable companies are shuffled into the stock indices and unprofitable companies are shuffled out. Can you imagine what would happen to the index averages if steel, railroad, and buggy whip companies were still included in the Dow? If you insist on being a buy-and-hold investor, it's a whole lot easier to just dollar average into the indices. As long as the charts don't look like the Nikkei after five years, you should end up in pretty good shape by the time you're ready to retire. Can You Trust Your Analyst? While many investors are still in shock over the decreasing value of their 401(k)s, a number of analysts and a few market makers, stuffed to the max with million dollar commissions, have taken a well-deserved August vacation at their summer homes in Europe, primarily in the South of France. Perhaps the mass migration to Europe and other hot spots is one of the reasons the trading volume has been so low recently. Nevertheless, when the Wall Street gang returns in early September, we are hoping the volume increases at least as much as the number of investor lawsuits. Infamous Mary Meeker will be welcomed back with a number of class action lawsuits for "biased research and slanted investment advice," according to one report. You may have also heard that fellow infamous stock analyst Henry Blodget has already settled a lawsuit filed by another investor over similar accusations. Then there is the sad story in the New York Times of a Microsoft employee, John Teeples, who entrusted his $700,000 retirement account and stock options to two Morgan Stanley Dean Witter brokers. Sixteen months later, all that is left of his stock portfolio is $403.95. Adding insult to injury, he also has to pay a $40,000 tax bill for the stock options that he sold. Thirteen other Microsoft employees lost upwards of $20 million in the last year to these same brokers, according to other claims filed in court. Instead of sheepishly accepting the total destruction of their stock portfolios, these investors are fighting back. I have a feeling the courts are going to be swamped with investor lawsuits like these for many, many years. What Traders Must Do Although investors believe they can wait years for their stocks to come back, traders must eke out a living everyday. If you want to be a successful trader, Oliver Velez and Greg Capra believe that you must take control of your life. "The problem for many people is they think that success is simply going to occur without earning it. Somehow, they miss the point that winning is the end result of a long process of trying to make it happen. In short, winners make it happen, losers let it happen."