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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Psycho-Social who wrote (43639)	3/25/2002 5:57:23 AM
From: puborectalis	Read Replies (1) \| Respond to of 99280

Hot stocks and has-beens What tech investors can learn from Liza Minnelli's wedding. March 21, 2002: 7:20 PM EST NEW YORK (CNN/Money) - Tech investors could learn a little something from Liza Minnelli. Or at least from the guest list at her wedding last weekend. Liza, you may have heard, tied the knot with creepy concert promoter David Gest in a wedding ceremony that gossip columnist Cindy Adams -- one of the bridesmaids -- described as "a night of 1,000 facelifts." Liz Taylor was also a bridesmaid; Michael and Tito Jackson were, together, the best man. The guests included a bizarre assortment of celebrity has-beens -- from Donny Osmond and Mickey Rooney to Esther Williams (you know, the swimmer.) Liza's guest list, if nothing else, shows just how quickly yesterday's A-list can become today's walking punchline. I need hardly add that the same thing can and often does happen to stocks, transforming "must own" names into "what was I thinking?" mistakes with startling rapidity. As Fred Schwed noted in "Where Are the Customer's Yachts?," his classic 1940 account of Wall Street foolishness, the stocks "considered 'best' change from period to period." He continues on: "The pathetic fallacy is that what are thought to be the best are in truth only the most popular -- the most active, the most talked of, the most boosted -- and consequently, the highest in price....It is very much a matter of fashion, like Eugenie hats or waxed moustaches." The in crowd So what are the most popular tech stocks today? There's no official list. But if you look at the tech stocks among the top twenty widely held stocks -- click here -- you find some names I think it's fair to call tech favorites, like IBM, Intel, AOL, and of course Cisco. (But you also find Lucent, a stock it's safe to say isn't one of the popular kids any more.) If instead you look at the most popular stock discussion boards on Yahoo!, you find Cisco, AOL and Intel among the top twenty stocks that have generated the most total posts -- but you also find current less-than-favorite names like Rambus, Infospace and Global Crossing in the top 10. For a slightly more objective measurement of sentiment, at least among one influential Wall Street clique, we might look at analyst ratings. Back a few years ago, analysts were ga-ga over high-flying tech stocks with seemingly unlimited prospects. Today, AOL (parent company of this Web site) tops the list of large-cap tech names, with 18 strong buys, 9 buys and two holds, according to First Call. Also near the top of the list we find Applied Materials, Qualcomm, NVIDIA and Seibel Systems. Analysts are also enamored of unglamorous tech stalwarts like Electronic Data Systems and First Data Corp. In some ways it's more interesting to look at the stocks at the bottom of the analysts' lists -- where "holds" outnumber "buys" and where you'll find more than a smattering of actual "sell" ratings. Malingering among the lowest-ranked names we find a number of stocks that used to be more popular then CBS's "CSI" -- among them Applied Micro Circuits, Corning and JDS Uniphase. You'll also find a few turnaround stories that haven't quite convinced Wall Street that their turnaround is real. Xerox is one of them. Xerox, you may recall, was one of the original Nifty Fifty, the hot-stock group of the 1970s. Today, after a long and bumpy ride, it's trading about where it was in 1980. But at least it's still in business. Indeed, value manager Bill Nygren (whose Oakmark Select has been a top performing value fund for some time) thinks Xerox has a much brighter future than virtually all of the names at the top of the list. I wouldn't be surprised to find some other interesting contrarian plays lingering at the bottom of Wall Street's list of favorites. --------------------------------------------------------------------------------