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Strategies & Market Trends : Fidelity Select Sector funds -- Ignore unavailable to you. Want to Upgrade?

To: Dennis who wrote (481)	11/25/1997 4:42:00 AM
From: Bernie Kaplan	Read Replies (3) \| Respond to of 4916

While the financial problems in Asia are extremely serious, at least we can take some comfort from the fact that the leaders of these nations are coordinating their efforts to do something about them immediately. Our guidance, as the world's most regulated and reliable financial superpower, is invaluable in this process, and everything happening in Asia keeps making our stock and bond markets the best ones on the planet, whether by choice or default. Despite Japan's 5% drop tonight (which by the way is less of a decline than they suffered on Oct. 27), the markets across Europe are UP at this time. This is certainly an encouraging response that could not have realistically been expected, and it bodes well as a factor that could limit downside on Wall Street today. As I have discussed recently, worldwide events, whether anticipated or out of the blue, have overridden and contradicated the most widely accepted methods of technical analysis. As a result, funds that have produced what would normally be regarded as good buy signals have declined, and until things settle down we need to be patient and wait for them to recover and perform according to their fundamentals. In any event, where any of the Selects are concerned, I have only recommended the smallest of investments, for those who wished to try to extract some profits during these unstable times. The past weeks have obviously not been the right time to sink $ 50 or $ 100,000 in any fund, and if one has prudently dipped his or her toes in the water, sitting on declines with an investment of $ 5-10,000, while painful, are not huge on an absolute basis. The tech sectors are obviously in the most danger as a result of the problems in Asia, and yesterday's revelation that Fidelity has been unloading stocks in the Energy Services sector make one wonder whose side they are really on. It would be interesting to find out how much cash the manager of this fund is sitting on after having caused some of the recent collapse of this sector. Nevertheless, where tech and Energy Services are concerned, I am positive that they will turn around and be the best areas of the market for recouping what are currently only paper losses. One always has the option of taking a 100% cash position, but selling some of these funds at a loss is rather pointless if there are no alternatives for recouping the losses. These funds will stabilize and produce technical signs of a subsequent rally. Obviously,we don't know if that will be today, three days from now, in three weeks or in two months, but whne it happens, we can increase our holdings and recoup our current losses that much quicker. This test of our patience gets harder every day, but with technical analysis rendered practically useless, it is an unwelcome but necessary offshoot of our quest for a truly globalized economy. Lastly, the number I gave you is my telephone number. The hotline was on the card that was enclosed in your mailing. Talk to you soon. Bernie