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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Sarmad Y. Hermiz who wrote (12420)	11/7/2003 9:50:21 AM
From: Sam Citron	Respond to of 95420

Sarmad, My understanding of history is that stocks are usually OK until the third rate increase in a row. I've had enough gains to fully fund a retirement plan. So I'll sit on the sideline for a while, and wait for 6-7% CD's - in a laddered fashion. What's in a laddered fashion? Your exit from stocks, or your entry into CDs, or both? Whatever the case, if you leave on the first rate increase to wait for CDs to hit 6-7%, you could be out for quite a while. Hope your day job is sufficiently interesting (and lucrative). as soon as the Fed gets into rates-raising mode, the increases will accelerate because of the budget and trade deficit If this is true, then the Fed should be smart enough to anticipate it. Therefore it may not raise rates unless provoked by a dramatically weakened US dollar, even though this would be a shot in the arm for the US manufacturing sector and the trade deficit. if China or Japan stop absorbing dollars, US dollar inflation will increase significantly What might cause them to stop absorbing dollars and how likely is such a scenario? interest rates will rise much much higher to attract funds from overseas to cover the deficits It's possible, but budget defecits may be helped by the strengthening economy with the capital gains taxes that it spins off and the reduced transfer payments that are required. And if a less hot-headed administration takes the helm next year, military budgets may not have to rise at the rate they have been escalating recently. I'm not saying the budget defecit will get better, but it may. In short, the situation is not as dire as you suggest. Sam

To: Sarmad Y. Hermiz who wrote (12420)	11/7/2003 4:59:30 PM
From: Donald Wennerstrom	Read Replies (2) \| Respond to of 95420

Sarmad, Les on his site has reference to an article on "finding an exit strategy" and interest rates. Message 19477536 Here's a snip. <<U.S. Equities: Timing An Exit Strategy 2003-11-05 08:40:00 Based on previous post-recession rallies, it is still too soon to sell U.S. equity holdings. The chart shows the current cycle relative to the average of the past three post-recession rallies. Contrarians are getting nervous now that the bull market is well discovered and retail investors are coming back into the market. Sentiment indicators are getting high, however, investors should avoid the temptation to bail out too soon: sentiment can hover at a high level for an extended period before the bull market runs out of steam. The key to tripping up the market is when the Fed starts to take away the punch bowl, i.e. when the real (inflation-adjusted) fed funds rate rebounds into positive territory.>> Don