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.

Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: sea_biscuit who wrote (4049)	9/20/2001 10:23:20 PM
From: uu	Read Replies (2) \| Respond to of 4710

Dipy, I think you maybe right about MSFT going down (however I am not so sure about it being cut in half). But then again it is not impossible for this to happen! :) Now I want to go ahead and give my prediction of what to come: a) Despite all the talk of the telecom being dead, I think with this new war on terrorists and considering how people would try to avoid (and never mind saving money) travelling to meet (businesswie or otherwise) we will see a slow recovery and strength in the telecom industry (and in particular in the optical network, and cellular). b) Nasdaq will drop to the 1200-1250 levels by the end of this year (possibly in about 3-4 weeks or so), however I have a hard time envisioning it dropping below that. But then again I never thought to see nasdaq under 2000 either! But seriously speaking, for Nasdaq to go to under 1200 we must enter a really severe long recession. And I am not really sure now if we would entere a severe long recession because: i) The government is in a pretty good shape financially (as oppose to how it was in the early 70's for example). And oil prices will not be going up dramatically either despite potential military actions. This is mainly because as the economy slows down and goes into a mild recession the energy demands will also slow down. Plus, with the war on terrorism, OPEC countries will bend-over-backward to the US demands to either lower the cost of their oild or increase their productions. ii) Government will be spending a ton of money to simulate the economy (for the so called terrorist war). And that has proven in the past to start the fire to push the economy forward and prevent it from falling into deep long recessions. c) The DOW however will most likely fall to the 5000-6000 levels - and in particular consumer related stocks will be the prime reasons for the drop. d) FED will continue to drop the rates to arund 2%-2.5% (or another 0.5-1 percentage point before the year is over). That should eventually somehow work itself into the economy. The same goes with every single central bank in the civilized world. e) Many people tend to compare the current state of the US economy with that of Japan a decade ago. The difference is our total absolute free capital and trade market, as oppose to Japan's self-centered, selfish isolationism trade policies. Plus Japanese (although being very nice and very hard-working people) do not have American adventuristic free spirit personal and business mentality and attitudes. I think what is happening is that insurance companies, seeing that they are going to have to fund large liabilities, have been forced to liquidate a lot of holdings, thus resulting in driving down both stocks and bonds. At some point there has to be a slow down to this selling. As stocks continue to drop I am sure a lot of little guys (the likes of you and I) will say "Thats it. Beam me up scotty, I cant take it anymore", and they throw in the towel. And if past is an indication of future results this will be the mark of "THE" bottom. So considering all this I would expect we will see a sharp steep decline in the coming days (weeks - but not months), and sharp recovery toward the end of second of half of 2002 (possibly a bit earlier). My only worrisom is how fast the rest of the world will react not to fall into a long depp recession. It is always the case that when US catches a cold economically the rest of the world gets a severe case of cancer! However once US recovers from its cold, the rest of the world also starts taking treatments to fight the cancer. Whether I am right or wrong is to be seen of course and I may end up eating my own words today! However, this is what I believe today based on my optimistic nature and view of life and this country in general, and also what I see to be the economic realities of the time (as seen again from my optimistic view point). As for my stock portfolio, (as you know ) I am all invested in high techs with 95% invested in the following stocks (VTSS, LSI, INTC, CSCO, JDSU, MSFT, GLW, TXN, and IBM). And as of today my portfolio is down by about 58%. I still have plenty of disposable cash that I will be using to accumulate to these stocks as they go down further. And as I have said before I am willing and will be holding these stocks for a long time to come if I have to. I am a strong believer of the US markets for which they reflect the very basics of all civilized human beings emotions, and free spirit and belief in a free capitalistic system. Fear is a powerful force and currently it is rulling the markets, however in the final analysis it will be the greed that would be the driving force to go forward. On a totally different subject, I dont know if you saw the President's speech tonight. But - and eventhough I never liked Bush and have considered him as someone who jammed himself into the white house similar to a 6 year old girl who wears her mother's makeup and dress to get into a night club to dance and have fun - I think he is the right president for what has happened to this country. He has the right people in place - far far better than Clinton did - to handle this war on terrorism. And for that alone I have come to like him and support him greatly.