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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: Wiski1313 who wrote (3238)	6/12/1998 7:43:00 AM
From: steve goldman	Read Replies (2) \| Respond to of 4969

Edward, We have always tried to keep specific stocks off this thread on onthe stock specific threads. I would take a few moments to address non-specific issues in your post. These apply accross the board to any stock, any position. When I decide to buy a stock, I will usually determine how much I would like to own of it, shares, dollar amounts, etc. I will usually analyze the market at the time and usually pickup about 40% of the ultimate position I want. No story, no company, no timeframe is ever so compelling that one could ever clearly say "this is the bottom or this can only go up'. The market never does what you want it to do, and usually does exactly the opposite of what you expect it to do. I usually buy the 40% on anticipation of some objective, better earnings, new product transition, cost savings, turn in industry cycle etc. Sometimes we might break that 40% out over a period of time as volatility might be high and we might feel even less confident of the pricing. Then, as things look like they are meeting our objectives, we might buy the second 40%, leaving the 20% for when it actually proves itself. Hopefully , if it goes as planned, we end up averaging up. Inever have a problem paying 20, 28 and then 32 and selling the whole position at 31. I have never been a big fan of tech and try to keep it less than 10% of any portfolio. looking for growth, look outside of tech. Every year rent, cars, milk and bread get more expensive, tech gets cheaper. But being cyclical, there are often great opportunities. In the case of the hard drive industry and WDc in particular, we viewed the industry as a fundamental sound one, data storage. We all know data only gets bigger and bigger and will NEVER get less. Apps only get bigger and right now, atleast, there is no substitute for disk drives. The sector which had proven itself very profitable over the past 3 years, was facing its usual downtrend. By all accounts, many anticipated these companies being black again by this quarter. Very simply, we like WDC's management, like Haggerty, and like the industry. We still do. We made that bet. Obviously, we got it wrong. This stock had the highest highs andnow the lowest lows. It was the most profitable in good tiems and bleeds the most in the worst. Averaging down significantly can be either very profitable or can ensure you own the most amount of the company when it goes bankrupt. At this point, with the hard drives, I wont buy anymore until we see them work through their problems. Right now the markets and especially the technology sector are turning very pessimistic. Individuals do not want to own tech. Its quite simple. Someone was saying the average tech stock was down 30% from its highs. Tech is cyclical and at this point it is turning down. Are we near a bottom? I think we have a lot more to go since the largest of the group, the DELLs, MSFT, INTC,s etc. have not been damaged. Pain will have to increase before we truly shake the market andthen perhaps we can move higher. Regardless of how compelling any sector or stock is, keep it to a minimum. A dollar is a dollar is a dollar regardless of which stock you get it in. You own XYZ...want more...buy a competitor...atleast you diversify amongst companies, if not sectors. Buy a different sector so if your first choice does badly, maybe the second does better. Sure, you could hit a home run, but diversification and allocation will keep you from striking out. BTW, you can subscribe to our free newsletter by sending an email to tdesk@yamner.com with SUBSCRIBE in subject. -Steve@yamner.com