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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Alan Bell who wrote (4894)	4/30/1999 9:43:00 PM
From: MrGreenJeans	Read Replies (2) \| Respond to of 15132

Alan, You Ask Some Tough Questions How do you weigh the uncertainty of the overall market with depressed prices for the equipment manufacturers? I agree that they look like bargains. But the recent strange gyrations of the market has me nervous. What makes anything worth anything...in one word-perception. I perceive the risks in this sector a risk worth taking because the outlook going forward seems very bright to me. It is early in the semiconductor cycle with strong growth ahead; semiconductor bookings for March and April have been extremely strong. The market makes any sane individual nervous. Once your money is in the market it is my opinion that you no longer have any control of it unless you hedge. You are at the whim of market forces but that is why investors in equities have done so well over the years by taking high risk they have reaped high rewards. There are always situations to worry about and to the degree you make high probability type investments or trades you are investing or trading with an edge in your favor. A number of times recently, you have commented on the market possibility being overvalued. We have the long bond at 5.6%, overly strong GDP growth, and the market at unprecedented highs. My opinion has not changed and at the same time I am approximately 80% invested and will take more profits as this market rises but that does not preclude me from making investments in attractive sectors even at the risk of a market correction. Outside of the semiconductor sector the telecom sector seems extremely attractive to me and I continue to invest in that sector as well and will place more money in those sectors absent a bear market. So what is the right way to rationalize buying an attractive sector when it looks likely that the market could correct and these would be better bargains? There is no right and wrong way to analyze sectors. There are hundreds of ways to make and lose money in the market no one right way for everyone. Like many I invest in a probabilistic manner placing my monies in investments I feel have high probabilities of doing well. Not all investments work out but as long as you net out profitably you are investing intelligently. Could the semiconductor sector become a better bargain? Of course but at these prices I am in. These companies have reached my buy point in recent weeks. The risk is not buying these companies and watching prices rise once more once perceptions change. The risk is watching prices go lower after I have already bought at these prices once perceptions change. Hey, that's why they call it investing. Hope this helps.