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Technology Stocks : QUANTUM -- Ignore unavailable to you. Want to Upgrade?

To: robert elmasian who wrote (4416)	10/31/1997 3:26:00 AM
From: Alan Hume	Read Replies (4) \| Respond to of 9124

Hi Bob, "the direct reasons for the big moves both down and up have been pretty flimsey" Current Market Situation As I see it, major investors and fund Managers in particular ,use" market disruptions to their own benefit. It works like this: The Hang Seng gets itself into trouble and causes a little concern in world financial circles. But in reality, if Hong Kong itself were to revert to a green field overnight, it would not change the fundamentals for the vast majority of the stocks traded on WS. The minor tremors caused by the Hang Sengs correction become purposely over exaggerated and are used for the reason to sell off a lot of stocks, with the purpose of dragging the total market down and thereby creating new buying opportunities. I am sure there are others out there who recall reading about 3 months back that Fidelity was capping the Magellen fund as it was becoming too big. It was attracting $400mil of new money every week. Large funds are extremely diversified in their composition, and unlike most of us amateurs, withhold a reasonable amount back in the form of cash or readily convertibles. The majority of us amateurs cannot afford such luxury. Being highly diversified they also accumulated quite a number of ,dogs". So now along comes some market turbulence, the blip on the market screen last week was The Hang Seng correction. So what gets sold?, A) the high performers where they have already made a killing, and will bounce back fastest and B) the dogs, which must be cleared out at sometime get thrown in to add fuel to the fire: The selling volume accelerates and causes the sheep follow. The market reaches a point where the PE's start to gleam and the buy orders go out. Us amateurs are pawns in this game mainly because we do not have the fluidity to take advantage of the situation. To elaborate my point, amongst the companies whom got hit hardest were those market darlings who have had a high recent growth rate, TXN; AMAT QNTM for example. MSFT which has been basing for the past 6 months was relatively unscathed. This time however, the cycle has been temporarily disrupted by Alan Greenspan. He has been itching for sometime now to increase interest rates, but he cannot find the justification as the barometers, the inflation rate , consumer spending, industrial output all have remained within bounds. His comment this week which stopped the rebound in its' tracks was that ,he would not have to raise interest if WS stayed at around its current level" or words to that effect. This I believe only to be a temporary break and that next week the rebound will continue What can we learn from all this? My conclusion is that matter how small the pot is , hold back a portion, say 30%, for the opportunities Sorry for taking up so much space with my thoughts, is this near the truth or have I fallen out of my tree? Alan