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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: akidron who wrote (18237)	3/27/1998 12:55:00 AM
From: uu	Read Replies (6) \| Respond to of 70976

akidron: First of all let me say that I also believe this market seems to be anything but a bubble to burst anyday!! After 6-7 years of being 100% invested in stocks (all high techs), I decided earlier last month to cash in and sold most of my stocks and my portfolio for the first time in so many years became somthing like 30% in stocks and 70% cash (currently I am 50% stocks and 50% cash). I also used all the logic you and jtechkids among others are using. Just look at the news that comes out everyday after the market close with companies either reporting or pre-warning of their shortfall in earnings with an uncertain forcast of the next few quarters, and yet the underlying stocks are little (if any at all) effected! And I have come to understand why, and while at surface it sounds very illogical, deep down it is very sound! And I tell you why! 1. Unemployment is at its lowest in decades. This means people are working and prospering. The level of education is at its highest in decades and the job market does consists in most part high paying compensations. Technology has resulted in a high degree of productivity, and let me emphasize on this productivity is what is driving this economy. 2. The working population has never ever been more concerned about their retirement and future as before! The saving and investment mentality is at its all time high. People rather save or invest than go out and spend it on fancy Polo shirts, or buy an expensive Porche! This will mean one thing low inflation! Add to that a strong dollar and the Asian situation and the external forces are making sure the domestic inflation remains in check for the next few years, and therefore low interest rates. 3. US high tech corporations are defining the future of man kind! And with that in mind, their growth will continue after their temporaty blip into a short lived slow down. People are aware of this and therefore they do not find it logical to sell just because a short lived blip!! That is why you do not see CPQ drop as much as it should have when they announced their earnings short fall, and the same for Intel, or AMAT, or any other high tech. This is just a temporary blip and with the current investment mentality this blip is seen as a blessing from the sky to take advantage of any drop and Buy! So you see, you can go ahead and list all sorts of logic and say well Intel is not growing the same way it did last year, or AMAT will have trouble in Asia and will not be able to deliver earnings as expected, or, etc.! It does not matter, because this is a temporary short lived situation! The market psychology no longer is in terms of a day or a week or even a year, it has truly turned into a long term view. So relax, and buy the shares of premium high tech companies (e.g. AMAT, INTC, CPQ, SUNW, MSFT, ...), because the party has not yet started! Regards, Addi Jamshidi