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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Douglas Nordgren who wrote (11897)	10/29/1997 12:03:00 AM
From: craig crawford	Read Replies (1) \| Respond to of 29386

Just some idle ramblings: (that apply to ANCR as well). 1. Some of this "bounce" in the markets was short-covering, don't forget that. The markets were oversold and smart money was covering this morning. 2. Some people couldn't get to their brokers or they would have been selling. Now your probably saying to yourself, "Yeah, and there were even more people trying to contact their broker to BUY!" That may well be true, but let's assume that there are still people that couldn't get to their brokers. They have to pay much more now and will be more reluctant to buy. They look at it like "I could have bought Intel in the 60's, now I'm going to have to pay close to 80." They will be scared. "I could have got C$CO in the 60's but now I have to pay 80. I'm not going to do that". On the other hand, picture how many people who wanted to sell their stocks but were at work or frozen stiff. They now have a nice "bounce " to get out of those stocks and re-evaluate. Don't think they won't take it. I don't know too many people who are excited about having to pay the "high" prices for tech stocks that they could have scooped up for cheap just a day ago. They will wait for a re-test. 3. Margin calls will be popping off soon. Could mean more selling, and the broker won't need you to call him. He'll just sell whether the phone lines are jammed or not. 4. In almost all "crashes" like the one's we have seen there is a re-test of the lows to shake out the weak hands. I expect that to happen here as well. We may even go lower. We bounced in '29 and in '87. In '87 we obviously recovered, but it was not straight up. It was a long and volatile process. The point I'm trying to make is we might be close to bottom and stocks might not go much lower. That doesn't mean it isn't a good idea to sell though. If anything we will bounce around with some rallies/short-covering and some selling. I don't see MSFT, INTC, CSCO, etc. making new highs next week. Patient and rational investors will be afforded many opportunities to get back in the market. This is not a money train that is leaving the station without us. One other thing ANCR fans. If this is just a "bounce" (and I'm not saying it is, I'm just advocating a defensive posture) and the market starts to "crash" further you can bet that you won't be getting into E*Charade or any of those other on-line brokers. The market might start dropping 500 points a day and you will be helpless. Imagine how people felt after jumping into Hong Kong on Friday. They thought they were getting a bargain, only to see it pummeled even further on Monday (down around 14%). We hear talk of a 17% rally tonight, but remember if a market drops 40% a 17% rally is NOT down only 23%. To give you an example, let's say a market index is at 10,000. If it drops 40% it will be at 6,000. If it then rallies 17% it is only back to 7,020. It's NOT at 7,700. Just something to think about. Imagine that while your thinking of buying ANCR or anything else on full margin...