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.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Don Westermeyer who wrote (1076)	12/30/1997 9:00:00 PM
From: Oeconomicus	Respond to of 164685

Don, the "January effect" is generally applied to stocks that are down at least 30% from their high where tax loss selling has pushed the stock to an oversold, undervalued level (usually reaching that level in late Nov or in Dec). When the tax selling stops, the theory goes, the stocks will rebound. The rebound, because it is so widely anticipated, doesn't wait for January. This buying, together with a lack of sellers in big gainers, can explain much of the action this week. Look at PSIX and AMZN or YHOO for clear examples of loser and winner effects. My feeling (hope?) is that this "reverse January effect" that is squeezing shorts and making us put buyers doubt ourselves will turn around when the calendar changes. It's happened before. Why would it happen this year (to the winners) you ask? Because the general sentiment of the market is much worse than it has been in recent years. The world, economically, is a mess. It WILL effect the US. PEs will contract from their current extreme levels. And bubbles will burst. Bob