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

To: advocatedevil who wrote (56109)	11/21/2001 1:58:20 PM
From: Sam Citron	Read Replies (2) \| Respond to of 70976

AD, With SOX now in the green and daily trend positive, how do you muster the conviction to extend your short here? Sam

To: advocatedevil who wrote (56109)	11/21/2001 2:41:35 PM
From: Jacob Snyder	Read Replies (3) \| Respond to of 70976

Article on insider trading: interactive.wsj.com This WSJ article says that insiders bought the September dip a lot more than they bought previous dips this year, and they are selling the current rally, to a much smaller degree than they sold previous rallies this year. So, since September, insider activity (for the first time this year) is indicating that insiders think this rally may be sustainable, and/or that valuations finally got good enough in September, and/or that they finally see a turn in business conditions. Anyway, this is one of the most important signals, much more reliable than, say, what individual investors are doing, or what professional analysts are advising. I would also note that, the dip in LT interest rates that happened when sales of 30Y Treasuries were ended, is being given back. Basically, all through 2001, ST interest rates have been making the fastest and furthest fall ever seen, but LT rates have stayed stubbornly high, only falling very slightly. So, the yield curve has gone from negative to sharply positive. Another encouraging sign that an economic recovery is on the horizon. Bond traders, like insiders, have a track record of being much smarter than individual investors. One more thing. A while ago, I looked at the market PE, and concluded that the S&P 500 should be (given current economic conditions and interest rates) at a PE (using trailing earnings) of 15, about half where we are. I've seen another graph, which has made me change my mind on this: pimco.com Look at chart 2, a LT chart showing inflation and market E/P (inverse of PE). Very close correlation, for the past several decades. Close correlation, no matter whether the economy is in recession or not. And indicating PEs are now about where they should be, not overvalued. So, I'm modestly more bullish now. The last day I added any long positions in techs, was 10/5. AMAT looks to have peaked (ST), and now is heading down. I'm trying to decide whether I want to start buying back at 35, or 32.5. Once I start buying, I'll buy in increments every 2.5 points on down. On the next following ST upmove, I'll sell at 37.5 and 40. Unlike the pre-9/11 rallies, I'm not going to get completely out of the stock, I'm just going to sell my higher-cost lots, while buying the dips, to lower my cost basis.