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Technology Stocks : Y2K (Year 2000) Stocks: An Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Runner who wrote (7098)	10/24/1997 1:48:00 AM
From: tech	Respond to of 13949

>>> RE: HONG KONG UP 5% << and a little about the Market Mentality. I often find it amusing when people who have no idea what the hell is going on, sell on every little scare that comes along. I think that as more and more investors have become "traders" using on-line services instead of the traditional broker, we will see more volatility in the markets than we have ever seen before. Although the development of the internet and the on-line trader is one of the main reasons that more and more people have turned to investing as their #1 hobby, these same traders, with little experience, lack overall knowledge that is needed to understand what the heck it means when something such as the Hong Kong market crash comes along. The benefit from listening to a investment professional and the calm soothing voice of a broker telling you that this is a over reaction to an issue that is only not bad for the U.S. markets, but actually GOOD, is missed. It is much easier to just push the sell button and wait for the dust to settle. The MM's use this opportunity to knock the stocks down to unreasonable levels and shake out as many shares as possible. The institutions usually buy large blocks of the QUALITY stocks that have reached undervalued prices. The professional traders also flock to the quality stocks that have been knocked down in this crazed panic selling. Media outlets also use this opportunity to ramp up ratings by focusing on the down side and keeping attention on the "crash" mentality. Let's face is bad news almost always equals better ratings. CNBC, CNN, Squawk Box, and other media outlets over exaggerate the down side only to come back the next few days and point out that it was all a over reaction. Keep a close eye on CNBC tomorrow and next week and see how they do a 180 on you. I suggest for those traders who have little experience in the market to pick up the phone and call a experienced broker on days when news such as the Hong Kong crash hits. Ask them what it means in the short and long term and validate your moves before you just push a sell button based on fear. Always keep in mind that unless you have access to after or pre market trading you will always end up selling after the MM's have knocked the spread down. If you think you will be able to get back in a few days later, don't bet on it. The spread can just as easily move up in pre market trading over where your sells were the prior day. Make sure you know what you are reacting to before you react to it. Here are some reasons that the Hong Kong crash was actually GOOD for the U.S. Markets. 1. A flight to quality. - As the world wide markets, especially Asian markets, become questionable money will flow to where quality is. The U.S. bond and treasure markets are where they will flow. 2. The instability of foreign markets may actually lead to a more reasonable rate of growth for the U.S. economy. Stable growth is what will keep the Fed. off of our backs and leave interest rates alone. 3. As U.S. Bond market flourishes, the stock market will soon follow. 4. The Federal Reserve will NOT raise rates in a period where foreign markets are so unstable. Any reaction by the Fed during this time would add to the instability. You might as well just forget about a rate hike in Nov. and possibly even Dec. 5. Overall the he U.S. Corporate earnings have been better than expected which is key for keeping/maintaining stock valuations. 6. Expect massive short covering as all of the above reasons push the U.S. markets higher. I spent most of the day today on the phone with several brokerage firms and institutional buyers. Most of them are just sitting on the sidelines waiting for a bottom. Well, I think the bottom is very close, close enough to look at the quality stocks that have been unjustly beaten down. Look for the ones who have had good earnings reports and have been able to keep up growth rates. Here is a list of a few I bought this A.M. VIAS, IMRS, KEA, EGRP, BMCS, MERQ, MCRL I am looking for a major bullish reversal in the U.S. markets possibly as early as Mon. or Tues. of next week. The only companies I would avoid would be the multinationals that are strongly dependent on overseas markets. ie. Banks, Some high-techs, some-pharmacuticals.