To: Dwight E. Karlsen who wrote (30928 ) 12/23/1998 1:14:00 PM From: Rob S. Read Replies (1) | Respond to
A recent market analyst observation was that because of the tremendous gains some stocks have seen, many investors have avoided selling them through the end of this year to avoid being taxed. If the mood turns just a bit more cautious as we move into the new year, or investors just want to lock in profits in the new tax season, then these stocks will draw selling. In the case of Amazon, the stock split will come at the critical point into the new year that coincides with this tax factor. Many of the Internet darlings are also participating in end of year window dressing. There is hardly a tech stock fund manager alive, IMO, that doesn't want at least a token showing of these darlings in their portfolio even if they think the valuations are now extremely speculative. The more these stock remain in an up trend through the end of the year, the greater the odds that we will get a sell-off in January. I still don't think this will be a major drop, only a technical correction, but the pendulum has swung very far very fast . . . in any case, it is shaping up to be a very interesting first quarter. The countering force that may keep these stocks from falling is the high growth rates of Christmas season e-tail buying. There is a good possibility that this has already been well factored into these stocks and even spectacular results may net investor disappointment. Watch the spin of the media and the perception of investors - if good news about sales is met with little enthusiasm, then that's a sign that these stocks are primed for a pull-back.
