Buy-And-Hope
Though not pretty, the
Nasdaq market looked well better below the surface than at the top.
Within the complex, there were three
winners for every two losers, better than a Naz down 1.1%.
Among the names, Sawtek
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was just another stock that broke out and failed, its Monday setback lousing up
its six-month formation for some time.
Barr Labs
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emerge from a 13-week base.
Cerner
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shape as it works on a six-week pattern.
Comverse
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steady-as-she-goes earnings picture, continues to present one of the
best-looking bases, if a bit choppy.
In the bells, the best actors remain
Tellabs
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"best" is used in a very relative sense.
In the market, it’s best not to assume
too much.
Along these lines, I would not assume
that some of the burners of ’98-early ’00 will return to their old ways in the
next bull market.
Even if the names are of high quality,
tremendous moves need time to digest.
For example, Home Depot
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up something like eleven fold from ’89-’92.
And even though HD’s earnings growth
remained vigorous, the stock did nothing for the several years subsequent to
’92.
I bring this up in light of comments
I’ve heard from investors about how tempting it is to buy such-and-such stock
down here because it’s 50% off its high.
If you are a true long-term,
buy-and-hold investor with a 3-5 year timeframe, and you feel you know a
company’s products well, that’s one thing.
Even then, the outsized drops in once-sacreds
such as Lucent
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(78%), Motorola
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PowerRating) (74%), Dell
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you rethinking the timeframe involved with this approach.
Does long-term timeframe mean 3-5
years, as it used to? Or does it mean six months, which is the feeling I get
when I speak with some buy-and-holders.
Moreover, if it makes you queasy to
buy a stock that’s 50% off its high and then watch it drop another 25% over the
ensuing three months, perhaps you shouldn’t be playing the
"catch-a-falling-knife" game.
At least not with your capital.