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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (41324)	4/26/1998 10:24:00 AM
From: j g cordes	Read Replies (2) \| Respond to of 58727

Dave, This type of activity by larger institutional buyers suggests that the large block buyers are having the same difficulty that many others are. Specifically, there are few areas of compelling valuation with the market at this level. Thus the funds and individuals are going with what they know. There's another issue with funds, which is given the huge sums of money they have to distribute into equities... only the largest cap stocks provide tradable equity. Jim

To: jjs_ynot who wrote (41324)	4/26/1998 1:33:00 PM
From: Robert Graham	Respond to of 58727

I agree that movement of money back into the techs is going with what they are "familiar" with, which you mentioned as the funds and the public going with what they know, despite the continued downturns in earnings and revenue growth by this sector. I also can see that the aggressive bidding up of a comparitively small group of stocks in the tech sector can be indicative of the funds looking at the same stocks in their difficult search for value in the market. The stocks that are being bid up by the funds are indicative of this search for relative value. CPQ earlier sold off due to their aquasition of DEC, but CPQ is stil considered a pretty solid company with good future prospects. Gateway is a very visible company that is seen as financially sound and in the same very successful industry as Dell, and look at how DELL's stock holders benefitted. So the thinking is that GTW in comparison to DELL has been undervalued in this high-growth industry, and perhaps the time has come for GTW to benefit. The same can be seen for IBM even though the quality of fund buying has not been anywhere near as as positive as CPQ and GTW since there appears to be allot of fund selling taking place at the same time. The market has left IBM behind, and now perhaps its IBM's turn to gain in price. I have seen when leaders of the past start to do well in today's market, the bull market is moving into its final stages. But as market liquidity remains high, this bull market can be prolonged. Bob Graham