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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Jan Crawley who wrote (14701)	8/26/1998 2:53:00 PM
From: Rob S.	Read Replies (2) \| Respond to of 164684

That sounds like a reasonable move. Now is a good time to "average in" with selling of puts in some of the beaten-down tech stocks. IBD reported the PUT/CALL premiums were quite low but I haven't looked closely at the semi equips or other tech stock sectors. Still, we have not had a cathartic round of panic selling in the techs but more of an "orderly retreat". An orderly decline is more negative that a major panic sell-off, IMO - indicating that more downside is still possible. The small investor has not pulled out of hte market that much. Mutual funds have seen a lower rate of deposits but the planned investments and payroll deposits don't appear to have been effected yet. The underlying economy looks good but not as good as many bulls think; we are still riding on a crest of world-wide expansion that has occured since the collapse of the cold war but now the world is glutted with over-capacity in most industries and collapsing prices. For instance, while semiconductor sales has declined over 14% in the last 12 months (June) even though the volume of production has increased, the capacity utilization rates has declined rather than improved. So even though end use of cheaper elctronic products has expanded significantly the pressure on prices continues to errode profit margins. The semi equip compnaies were partly to blame for causing the glut in capacity both by being self-servingly optimistic about capacity needs and by encourning the international banking community and government organizations to pump billions into the Asian Tigers to build gigantic capacity while mounting incredible debt - (sounds something like Amazongonenuts.com's game plan for disastor). I think it will be well into the middle or end of next year before semi companies significantly increase capex for semi equipment. The group trades at least 6 months ahead of sales. That leaves some months of a possible continued slide down before improvement. First the semis must see light at the end of the tunnel and then the equips will brighten up. Still, it's not a bad time to start selling puts on the sector - semis first and equips second.