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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: peter michaelson who wrote (5729)1/11/1999 11:30:00 PM
From: Terrapin  Respond to of 78669
 
Excellent point.

I've heard commentators say things like "90% of the market capitalization is in the ten largest stocks..." I'm exaggerating but their point is clear: the nation itself is not diversified.

As for AMZN, my wife and I talked about shorting it but this is what I decided. The downside risk (for one who shorts the stock) is wholly characterized by the irrationality of the uninformed, over-zealous Mob (I thank Ayn Rand for the term). They are wrong and I know it but their size and energy makes them formidable. This isn't true for a long position in a value stock where I've done some research, see potential and then wait for other reasonable people to see what I see. I just don't have the guts. I do wish luck to everybody that tries it.

In the meantime I watch as the January effect puts a little bump in the beaten up sectors I was watching for values. Perhaps that is best. I'll get back to raising cash.



To: peter michaelson who wrote (5729)1/12/1999 8:15:00 AM
From: peter michaelson  Read Replies (1) | Respond to of 78669
 
Some market capitalizations as of January 11.

MSFT $367 billion
INTC 233
Cisco 165
IBM 175
Dell 100
Compaq 82
HP 75
Oracle 45
Sun 36
CA 25

AOL 76
AMZN 45
EBAY 11
YHOO 47

GE 325
WalMart 181
Merck 179
XON 173
Nokia 165
KO 165
Pfeizer 153
AT&T 150
Lucent 149
MCI/WCOM 138
pHil/Morris 135
Glaxo 133
Citigrp 131
Bristol Myers 129
Nippon T&T 124
BankAmer 121
P&G 116
AIG 108
J&J 108
Deutsche Tel 102
Daim/Chrys 101



To: peter michaelson who wrote (5729)1/12/1999 10:21:00 AM
From: jeffbas  Respond to of 78669
 
Excellent point, Peter, about a crash in Internet stocks taking the whole market down. I share that exact concern. Stock pricing has a
large psychological component. A lot of people will feel gloomy when these stocks start dropping.

Unfortunately for us, we underperformed on the upside since we did not own them and it will be only small comfort to sit and watch our value stocks drop less.


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