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 : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Paul Dieterich who wrote (5874)	6/16/1998 1:43:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 10921

Re:Most of these stocks are not fundamentally oversold. During the last downturn, most of the group fell anywhere frm 50-70% though most were at the middle to bottom of that range(50-60%). We are currently in a situation where many are below their '96 levels in terms of P/S(LRCX) and others which have fallen %-wise more than they did in '96(KLAC, PRIA, CYMI) The latter list goes on and on. Depending on what you use as a gauge, much of the sector is cheaper than in '96. BK

To: Paul Dieterich who wrote (5874)	6/16/1998 6:57:00 PM
From: Jess Beltz	Read Replies (1) \| Respond to of 10921

Paul, I think the answer has to do with market psychology, and there may actually be a way to play it. I think there is a ton of money waiting to flow into the sector and catch the next cycle at its bottom (implicit assumption on the fact that the cycle will continue in the future as it has in the past.) Therefore, on each abatement of bad news, some of that money will start flowing in thinking (more like hoping really) that this is the bottom. I think that they're doomed to more disappointment until there is real and meaningful reform in Japan, but they have a right not to see it that way. The play: Buy towards the end of a big downward day (or the next morning), Wait for the optimism-induced bounce, Sell and wait for the next downward day. With respect to this strategy, the obvious downside risk is that you'll miss the real bottom and sell out when you should have held. The upside is that you'll almost certainly be out of the market if the yen continues to decline, the Yuan gets devalued, etc., with the chance to pick up some real profits off of a series of dead-cat bounces. I DO NOT RECOMMEND this strategy. It involves serious timing games and I am notoriously bad at that. My own strategy is to wait until I see some end to the mess here, and then jump in with both feet into selected issues. jess.