INTC Disaster Du Jour…

• March 9, 2001
• Jon Najarian

I’m
heading off to a speaking engagement to the top producers for AG
Edwards
(
AGE |
Quote |
Chart |
News |
PowerRating) in St. Louis this morning, but I wanted to get a
quick note off to all of you. I hope everyone weathers this storm and takes
some time this weekend to regroup and get ready for the opportunities facing
us next week.

Now
that the Nasdaq’s decline is approaching the dismal bear market of the 1970s,
even Wall Street’s most resolute bulls have already, or are in the process
of throwing in the towel. Even Abby Joseph Cohen’s attempt to stem the tide
has failed, but that’s probably the most bullish sign we’ve seen for the
past year, as our indicators continually point to more bad news than an Iraqi
radar monitor.

Today’s
disaster du jour is
Intel
(
INTC |
Quote |
Chart |
News |
PowerRating),
which followed Andy Grove’s prediction of three days ago that the recovery
would not be the V-shaped bottom so many bulls had been calling for, but a
long, slow recovery process. Why, you ask?
Well partially because computers are a commodity. Most of us only buy
new computers and related equipment when the old stuff breaks. Sometimes,
there is something so new, so compelling, that a small number of techies gotta
have it. That could have been INTC’s Pentium 4, but they badly missed their
window of opportunity and everyone simply bought more memory rather than
buying a new box. Today, we hear that INTC and Cicso

(
CSCO |
Quote |
Chart |
News |
PowerRating) will miss numbers going forward and lay off workforce.

OK,
that’s the bad news, but here’s the good news; we are no longer in an
increasing interest rate environment. We’re in a shrinking interest rate
environment. Bad as the damage has been (notice I’m speaking in past tense
here), its extremely doubtful we will fall into a deep recession with 4.2%
unemployment. Individual shares may be near a bottom, but if you have lost
your confidence to pick those individual shares, keep in mind that the QQQ and
SPY are great surrogates for mutual funds with much better liquidity and
access.

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