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Technology Stocks : Full Disclosure Trading -- Ignore unavailable to you. Want to Upgrade?

To: Sarmad Y. Hermiz who wrote (8939)	5/7/2004 1:17:09 AM
From: Sam Citron	Read Replies (2) \| Respond to of 13403

OT Thanks for the reply, Sarmad. I value your opinion and it helps me to think things through instead of making precipitous moves. I did not have a chance to watch the market closely today as I was involved with certain family activities. I think that you underestimate the demand for US goods abroad. I think that there are plenty of countries where Motorola competes alongside Nokia, GM and Ford alongside Toyota, Boeing against Airbus or Colgate against the local brand. At some point rising "hatred" of US (to use Friedman's term) could be expected to spill over into purchasing behavior by businesses and consumers. It just wouldn't be cool to buy US goods anymore. Just like it was not cool for Indians to buy or wear British goods or clothing during the 1920s and 1930s. It's not that hard to find substitutes and it could be a big deal if things get much worse. I do not see why tech goods would be an exception as long as substitutes exist. I think that the Euro is probably now big enough to challenge the US dollar as the favored reserve currency, so that is a further leg of support that is abandoned. As far as effects of all this mainly being on high PE stocks, I find it hard to believe the market is quite that inefficient as to award high PE ratios that indiscriminately. The reason WDC has such a low PE is simply that the market has a memory of the strong historic cyclicality of the HDD business, of the intense price wars, and the high mortality rate of the companies. So it takes a show-me approach to the changes that we frequently observe. A low PE likely provides some margin of safety, but not total immunity. I don't pretend to have any answers, just more doubts. And these doubts make me, at least, less inclined to take risks with my money. First we had a boom-bust cycle. Then we had intense corporate scandal leading to widespread distrust of corporate governance. Now it seems to me that the limelight is turning to the government itself. I have not seen such fear and loathing since the Vietnam era. This will be a very intense and uncertain election. Sam