Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (15944)	12/25/1997 4:28:00 AM
From: halfscot	Read Replies (1) \| Respond to of 50167

IQBAL: Thanx for the Forbes article/link. This more or less confirms what we've been seeing in the charts for several months now. As many TA'ers will testify, I think, the technical breakdown(s) of a chart/sector usually foreshadow the inevitable that is confirmed once the bad news is released. In other words the market (insiders?) usually knows what's coming before it's confirmed with pre-announcements, downgrades, etc. It might be wise right now to look at making money with shorts/puts in sectors that've been beaten down but still have some laggards to follow. Some examples: From the Forbes article: Server and Enterprise Software- BAANF-heavy asian exposure but still 168 pe and hasn't fallen nearly as much as its contemporaries. Networking-CSCO and LU-CSCO will tumble even if there's a hint of a problem-it's the only networker left holding rich valuations. LU is less of a pure play but has a very high trailing pe and looks weak technically and is not immune to the asian flu. Software-and who can overlook MSFT. Has held up remarkably well but looks to be rolling over. Any further bad news and look out below! We've been seeing the same happening in the oil/drilling sector. As all the stocks in the sector have fallen against screams of protest as to their strong fundamentals, etc. It turns out there may be some there there after all. Some bad news is finally leaking out to confirm the sector's breaking down. I think this sector is shaping up to be a great long condidate again but we have to see some strength first before jumping back in. Just my 2 cents worth and IMO only. Be interested to know other's opinions and any ideas as to stocks waiting to take the same path as their peers. halfscot

To: IQBAL LATIF who wrote (15944)	12/25/1997 10:08:00 AM
From: Cyrus	Respond to of 50167

Iqbal A thought which has crossed my mind in the past few weeks is the possibility of looking at this as an opportunity. There must be ways of making smart investments in beaten down Asia-Pacific markets, when the time is right. As these financial challenges work themselves out, there will be a good time to invest in well thought out strategies. Using the Mexican example of several years ago, good companies for sale cheap. Would it be a good idea to go on the offensive, instead of covering/defensive trading over the next few months on US semis etc.? The IMF does seem committed to working this crisis out before it gets worse, and with this backing I think things will turn around in the Asian markets. Doors are opening to investment in these areas and major world companies are looking at buying assets. there are allot of companies around with cash in hand and they would likely purchase these assets at discount prices. The question here is how far open will the door be? I think the new government in Korea appears to be committed to allowing foreign investment until this crisis is worked out. With the IMF bailout and sale of major assets happening, the economies of these countries should in fact come out of this stronger than ever. This should present an opportunity for investment. I have zero experience in investing in these markets, but maybe you or others on the thread do. There are many ins and outs, I am sure. Personally I would be willing to invest long term in the stock of the right company in this region. This is all open for discussion to anyone. Darrell

To: IQBAL LATIF who wrote (15944)	12/27/1997 2:37:00 PM
From: Judy	Read Replies (1) \| Respond to of 50167

Ike, the issue is not whether one should ditch the semis but at which point should one go long again. The Forbes article presents information already known but which the market took time to come to grips with. Two salient points to keep in mind relative to this sector and this market. First the Asian currency crisis should stablize in a couple of months unless these countries totally disregard the advice offerred by the IMF. Then businesses will try to plan for recovery after currency stability has been achieved ... but they cannot commit funds for growth and purchases until their own internal picture clears. Just as contingency planning now is taking multiple iterations and each plan gloomier than the previous, I'd expect recovery plans to evolve thru multiple iterations and each succeeding plan being more optimistic than the preceeding one. And until the series of recovery plans show sequential levels of increasing optimism, tech stocks will be in the doldrums. Second, the semis and semi equipment makers are cyclic industries that started their up cycle last summer. These stocks move in legs and completed two of three legs prior to being derailed by the Asian situation ... the third leg would have had a 4-6 month run. Given that order may not be restored to the Asian economies for many months, it is possible that the up part of this cycle may be over and this sector could enter the down/dormant part of the cycle. Cycle length for the sector is about 3 1/2 to 4 years. There is no new paradigm.