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

To: Ian@SI who wrote (21665)	7/12/1998 10:53:00 PM
From: Big Bucks	Read Replies (4) \| Respond to of 70976

Ian, I'm trying to use some "investor psychology" here but since when did the market ever do anything that made logical sense? I see it developing this way: 1. Panic among investors who bet/invested at $28-$32 who are afraid that they will have significant mid/long term paper losses if the stock drops another 10-25% from Fridays after hours close of around $27. 2. Fund managers who want out as there is little/no upside price potential or industry growth for 6-12 months. (Remember they want to have window dressing with strong, profitable stocks, especially around end of quarter, end of year bonus time). They can pick these semi stocks up at lower prices when things look like they are going to improve. Why hold on to a decreasing asset that may drop another 25-40% from these levels when they can get out and come back in later? 3. The Japanese yen is falling further, their political system is a mess and huge bank defaults are just around the corner. A severe recession has been confirmed. This could force the Chinese to have to devalue the Yuan to compete for markets against its' neighbors. The US fund managers get nervous and decide to take a "flight to safe investments" ie, gov't securities, bonds, etc. 4. Russia is on the verge of economic collapse, the IMF bailout won't work, too much corruption and political infighting for any real "controlling influence" to take charge and make things happen. Europe gets nervous the markets respond negatively, again US fund managers pull back from European stocks/markets, a further flight to safety. 5. US companies have increasing inventories due to lost sales opportunities in countries with devalued currencies, US layoffs are increasing due to overcapacity. US corporations have decreasing profits/earnings forcasts. This causes sector rotation into small cap stocks and "value stocks" with limited foreign exposure, leaving just the "shell" but no meat in companies with high foreign exposure. Man, this is a gloomy post, but the match has been struck, the fuse is lit, when will we feel the shock wave?? My bet? Oct. BB