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love_cab_chard
Master of Wine
Posts:12497
 | | 03/21/2003 4:15 PM |
| What do you guys think of this HUGE rally. Sustainable or setting itself up for another BIG fall? This time, I am really Not sure (@ all). This is obviously due to the success of the War.
But, the economic #s are still really bad. Last week over 400,000 new benefits claims. And, anything over 400,000 is considered “dangerous” levels as far as the employment picture goes. Oracle warned. Retailers do not have much hope for any big sales. Consumer Confidence is @ a 12 year low.
Tough call. | | | |
| ChangeMe
Barrel Filler
Posts:1210
| | 03/21/2003 4:31 PM |
| My analyses only end up costing me money. I wouldn't want to do that to anyone else.
Really, I don't think we will see any more major losses, but I don't think that the overall market will see much growth for another 12-18 months. There will be rally's at the end of the war, but those will be kept in check by economic bad news (consumer confidence, unemployment, lack of job creation, etc).
Right now it is a stock-pickers market, but I seem to pick two bad for every good. | | | |
| ChangeMe
Master of Wine
Posts:12891
| | 03/21/2003 5:31 PM |
| my analysis is to hide your money i a cigar box like i do  | | | |
| David Niederauer
Los Gatos, CA
Master Sommelier
Posts:15756
| | 03/21/2003 5:37 PM |
| | I will post here what I'm going to buy. You all should immediately short it. | | | |
| love_cab_chard
Master of Wine
Posts:12497
| | 03/21/2003 6:55 PM |
| | Anybody work for a company that is even considering opening up their budget(s) or business investment/spending? That's what it comes down to... | | | |
| GATC
Barrel Sampler
Posts:2420
| | 03/22/2003 12:36 AM |
| LCC, good point. One indicator that I use is the traffic. 2-3 years ago, the 680 freeway (the main feeder into Silicon Valley from the northeast) jumped from the 10th to the 2nd most congested freeway in California. They just finished the carpool lane, so I bought an electric car (these suckers are expensive!) in December just so I can drive in the carpool lane by myself. I've only used the carpool lane twice in 4 months as the traffic is less than when I started my company in 1994. Since that time, they built approx. 15,000,000 sq ft of office/mfg/lab/whse space. No wonder that there is a 27% vacancy rate and this does not account for vacant building where someone is still paying the rent.
In the 1980's I thought that the US was going downhill. I built many factories in Mexico, Canada and Singapore and moved most of our manufacturing from Silicon Valley to these places. I thought with most of the manufacturing moving out of the US, we were doomed to become a service country with McDonalds being the biggest employer. Fortunately, the Internet related industries and the biotech help the US in the 1990's and into 2000. The Internet (with English being the dominant language) has kept the US on top. The language is a key factor in maintaining economic dominance. Note that all airline communications (pilot to controllers) is in English. When European powers do business together, they mainly speak English (do you think the French will speak German to their German business partners and visa versa?).
But, I greatly fear the emergence of China as a world economic power. It took them awhile, but they have finally come up with a strategy that is quite brilliant. Each area of the country specializes in a technology and market that is best suited for them. One area specializes in making Swiss watches and they now make better Swiss watches that the Swiss for a fraction of the cost. One area specializes in producing garlic. They produce better garlic than Gilroy, CA (the garlic capital of the world) and they can do it for fraction of the cost. I'm very familiar with the biotech potential in China and it is frightening. I'm also very familiar with high tech potential and that is even more frightening. As the head of a company that does both biotech (reagents) and high tech (medical instrumentation), I can tell you that most of the good scientists and engineers are Chinese. Many of the top scientists at Lawrence Berkeley Labs, Lawrence Livermore Labs and Sandia Labs are Chinese. I met someone who is a family friend of Wen Ho Lee (sp?) and actually started the grass roots campaign through the Internet to clear his name. They have only been able to accuse him of improper protocol (by not backing up information properly), but it is absolutely clear that the Chinese government have virtually all of the top secrets from Livermore and other places (including missile and nuclear technology to attack us from their mainland). Fortunately, their government is covering up for the thousands of inefficient factories from the Communist days that will completely bankrupt the country if all the loans are called, so their dominance will take time.
Europe is struggling. Japan, which at one point was so strong economically that it was frightening, is going to continue their 10 year funk for another 5+ years. On problem with countries like Japan is that their economic infrastructure is so inflexible and ingrained into their psyche that they cannot address the problem without destroying their whole system. US will only recover through innovation, technology and productivity improvements. One bad sign is that a lot of the top brains from China and India used to come to the US. Now some of them are going back. This influx of talent to the US (which greatly weakened their native country and greatly enhanced our country's economy) was critical for our growth in the 90's. Tightening down on immigration, visa's etc. will hurt our changes to grow. The markets will only go up if there is stability and risk is minimized. My worst fear is that this war will foster more terrorism. I hope I'm dead wrong. If terrorism is rampant in the US, expect the stock market to drop again to new lows.
For my company, our main business is cancer research and cancer diagnostics. Sometimes I feel like a mortician. Business is great, but that means that cancer is on the rise, so good business is nothing to celebrate. | | | |
| Dr_Tannin
Barrel Sampler
Posts:2498
| | 03/22/2003 6:10 AM |
| FWIW, I am in accord with you on many of your observations.
One additional comment:
v/v cancer- There has been very little therapeutic success for many of the most common cancers over many years. In fact, the gains in survival have nearly entirely been brought about by advances in diagnostic imaging (CT scan) or lab tests (PAP smear). In fact, this is part of the basis for the screening frenzy that exists.
This is a double edged sword.
1. The huge expenditures spent on coming up with successful therapies has nowhere near a guaranteed benefit; and, society/government is not likely to be willing to continue to afford/pay for the exponential cost burden of diagnostics for screening and diagnostics or trial therapeutics for much longer (though individuals may on their own).
2. When a real breakthrough anticancer drug of the ilk of penicillin or aspirin is developed or a better distribution targeting is engineered, the potential boon to society in man hours and lives saved and the potential profits could be enormous.
Good luck in your endeavors. | | | |
| David Niederauer
Los Gatos, CA
Master Sommelier
Posts:15756
| | 03/22/2003 3:04 PM |
| Quote:
One area specializes in making Swiss watches and they now make better Swiss watches that the Swiss for a fraction of the cost. One area specializes in producing garlic. They produce better garlic than Gilroy, CA (the garlic capital of the world) and they can do it for fraction of the cost.
GATC,
What about wine? Seriousely. | | | |
| love_cab_chard
Master of Wine
Posts:12497
| | 03/22/2003 4:50 PM |
| Well, I am torn. I sold (about a month ago) everything that I bought (about 4 months ago @ the bottom). Made a profit that I am happy with (@ that time), thinking that it will go down to that level again for sure. Now, I do not know.
Why did I sell? Damn, should have held (Monday morning QB). Is it going to go back down as to give me another chance to Buy? Or, it will never see those Lows again? | | | |
| love_cab_chard
Master of Wine
Posts:12497
| | 03/22/2003 4:58 PM |
| | Damn stock market. Sometimes I feel like totally getting out of it (for good) for a peace of mind. It would definitely add some years to my life. | | | |
| Dick Bonder
Grape Fermenter
Posts:484
| | 03/22/2003 11:55 PM |
| "It's the economy, stupid".....The economy still rules, but for every piece of ordinance that is expended in the war it will be replaced by the purchase of another. Those who bought defense stocks a while ago are being rewarded.
Dick | | | |
| love_cab_chard
Master of Wine
Posts:12497
| | 06/06/2003 3:20 PM |
| | Any one notice the rally the last 6-8 weeks? Think that it is for real? I do not think we will hit the lows (unless some external measures take place), but I think that in the July-Sept (summer blues when the volume falls), it will go down some amount. Too fast, too far, too soon (I think). | | | |
| Budman
Master of Wine
Posts:11876
| | 06/06/2003 3:32 PM |
| lcc,
The Dow is still around 3000 points off its high.
UP, I say dammit! UP! UP! | | | |
| Blair Ridley
Wine Labeler
Posts:3980
| | 06/06/2003 3:47 PM |
| Talk to me when the NASDAQ is back to 5,000. | | | |
| ChangeMe
Master of Wine
Posts:12891
| | 06/06/2003 3:59 PM |
| | good point short | | | |
| Pool Boy
Laurl, MD (DC suburb)
Master of Wine
Posts:13711
| | 06/06/2003 4:21 PM |
| | I am amazed my company's stock has risen from 2.25 to 5-ish today. Very weird. | |
www.roguefood.com -- www.cellartracker.com | |
| Dr_Tannin
Barrel Sampler
Posts:2498
| | 06/06/2003 5:32 PM |
| The current rally is good. I need to ditch some few remaining things.
Bear with me and I'll share some thoughts with you.
A bully rally in a prolonged bear market is what I'm hearing from the experts I like most. It will be time in several months to short again. This bull market mania is much wishful thinking and momentum mania. Always has been. Pockets of transient equity success, like boiling liquid bubbles, are inevitable. Pension liability, failure to expense options, inability to increase prices, and steady gas/oil prices are stumbling blocks to any real growth overall. Until debt yield rises, tough call. Pay down the mortgage or other nonfixed debt.
But this is a very difficult game for individuals like you and I. The people that make killings are the very high company management and some brockerages. Even employees in high tech, as many here are, are not privy to the most useful info. or stock timeliness and employee option tools. Further, non employee stockholders are voting against employee options, big executive parachutes etc. In fact, most employees who make money from ESOP's make it from company buyouts, not their own good decision making.
I can't give more than what I've found over time as anecdotal experience and from reading. My time on Wall Street told me nothing more than to be wary as this is really a big boys game. The market is as much about judging behavior psychology habits as anything else.
I am no analyst.But, analyst information is also pretty much useless. They make money for the person that gives them a paycheck like you and I.
Some well written studies have shown that there is no correlation with hold or buy analyst recommendations and 'your' results. The sell recommendation is the only correlation over 0.5. People have a much harder time selling than buying. Buying low and selling high is so hard because its' antipopular. In fact, most people respond once there is good news and gains have pretty much been made. Most individuals' mutual fund returns are far less than those of the fund itself.Take buying. Remember, money is made when someone buys from you at a higher price. Well, as the price goes up, both the profit and the likelihood of finding that person get smaller and smaller. How many people dumped DNA after its' meteoric rise recently? [Good company, now overvalued-bad stock. Sell!] FWIW, I like the idea of buying value for the long term--most studies show better than growth-- trading growth in the short term in taxable accounts, and shorting as the peaks go higher. Conversely, momentum buying really triggers opportunity. Dollar cost averaging is OK, but is too hands off; I wish I could buy the best low, far better. But the hardest thing is to love the unwanted and find the gems in the rock.This is one reason why shorting in the short term works well.
Government accumulated debt will ensure that in several years bonds will be desireable again and then treasuries will be king.
I could easily be wrong, lcc. I've stuck my foot in my mouth periodically all my life. But I've found relative success by shorting the last 3 years, then buying back at market dips. Don't eschew equities. 30-70% is a good proportion depending on the times. While the economy weakly correlates temporally with the market, the economy tells you what you need to know. Is your company going gangbusters? Top line growth or bottom line? Is the accounting on the up and up? Are you getting more and more options or more salary?
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| David Niederauer
Los Gatos, CA
Master Sommelier
Posts:15756
| | 06/06/2003 5:32 PM |
| Short,
You mean in 20 years? | | | |
| Blair Ridley
Wine Labeler
Posts:3980
| | 06/06/2003 5:36 PM |
| davidn -
I am hoping for 10! | | | |
| love_cab_chard
Master of Wine
Posts:12497
| | 06/06/2003 5:50 PM |
| Trying to time the Market is foolish. No one, & NO ONE can do it.
I've sold into this rally & made some $$$. And, sold some stocks to break even (to take cash off the table) & sit on the cash (to see what happens). I have many more to SELL (when NASDAQ hits 5,000 again). "When", you say?!? That is indeed the question. | | | |
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