To: Jenna who wrote (9716 ) 5/27/1998 2:00:00 PM From: Jenna Read Replies (1) | Respond to of 120523
Market Assessment: Model portfolios in 'famous' newsletters are selling out. They are touting their gains in the first quarter of 1998 but not saying much about the large losses these last trading sessions. I'm still a staunch believer of the the buy and sell theory and not the buy and hold theory. Sector jumping has proven successful and there is no reason to hold semiconductors, computer stocks, etc if you've had a 15% loss. I makes more sense to me to stay in cash with short 'treks' into some good companies with good earnings reports or good value and growth going forward. They are there and I will find them. They are now being overshadowed by the 'popular' losers in technology sectors. I think this 'correction' is needed and is healthy for overvaluations rampant in the market. Every single earnings period we go through the same 'fears' of the companies that give out warnings on earnings expectations. The bigger companies that dominate the index funds have reported fears of lower earnings. You have to expect market confidence to be hurt in light of this. I don't think that large cap stocks will recover as quickly as the small to mid cap stocks. Their high evaluations will not let them recover as quickly, especially in light on the full impact of the Asian crisis still lying ahead of them. I personally will be looking for companies with low PEG's and high Growth prospects going forward. They will be 'uncovered' and analysed throughout the next earnings quarter. Try to recall the nice gains made by companies like ANN, LOW, TLB, ERTS, TJX, MDT, CNJ in the last few weeks. Companies like these and others will regain momentum and others like the internet sector (especially stocks like NSOL, MSPG, SEEK, OZEMY, XCIT) will bottom out and renew their gains. Right now I'm looking at stocks in the Brokerage & Investment sector, Leisure, Telecommunications, Retailers. I'm going to start looking at companies reporting in June/July and begin analysing them as soon as this weekend.