Stock market

[DDCSpeed]

Can someone explain the current situation of the economy? I been following the nasdaq and its been a roller coast ride. I want to cash in during the nasdaq's low time but how do i go about doing that?

 

[Double Trouble]

Ummm... anyone that knows the answer to that question wouldn't be wasting their time over here, they'd be too busy trying to find some grey poupon

The best anyone can do is make educated guesses.

Judging from the latest indicators, I would think we still have some shaking out to do in the tech-heavy Nasdaq, after which I think we'll see the market rebound around the 3rd quarter of this year. There's already some signs of a light at the end of the tunnel, such as business inventories being very low, housing starts slowly creeping up again, the bond yield curve starting to straighten out etc etc.

I'd say if you plan to do any investing, you'll get some real bargains in two or three months.

.... but that's just my opinion.... worth exactly what you paid for it.

 

[Javelin]

First of all, it is extremely difficult to time the markets. In fact, it should be impossible and any success you have is just a result of luck.

That being said, Nasdaq looks more reasonably priced today then at anytime in the last 2 years so if you are looking to get in long term(5+ years), now would seem as good a time as any.

Short term volatility is still fairly high and i think will remain so at least until the fed's next meeting. So if you are looking to make a quick buck its a big gamble. The dow looks to be the safer bet at the moment.

 

[jjm]

Every industry and academic study ever done shows that it is impossible to time the market successfully for more than a very short period of time.

If it makes sense for you to be in stocks (income, age, risk profile, time horizon), then the best idea is to regularly put money in. Assuming that the stock market generally rises (there has never been a 25 year period when it has not), dollar cost averaging by investing regularly can be a very effective way to participate in the market.

Unless you have a lot of money so that you can diversify adequately, buy no-load mutual funds rather than individual stocks.

 

[Doggiedog]

Actually Tagej, inventories are still quite high and estimates for the burnoff are getting pushed back into late 2H01. With NT today announcing a $2Bil rev shortfall, it looks like the burn of inventories will take longer than expected. Yesterday's rally was off of Ciena's positive comments but their quarterly revs are like $350 mil. If you look at NT, LU and CSCO, their revs are in the tens of billions so Ciena is just a drop in the bucket and not really a good gauge on the state of the market.

 

[Double Trouble]

DoggieDog, thanks for the update . It depends what sector you're looking at. In some sectors inventory has started dropping, which is usually an indicator that business will soon step up production to get inventory back to the level they previously had.

 

[Doggiedog]

Yeah. Sorry, I was being technocentric being a technology analyst. But there are still a lot of signs of pullback in the tech sector. I'll give you another example. Everybody's expectations for WW handset sales is around 600 mil units from 425 mil or so in '00. I'm now starting to see estimates of about 475-500 come out because no one is buying current generation phones and waiting for 3G. If 475-500 is the case, then the chip stocks are in for another disappointment.

As for PCs, nVidia had a pretty good quarter but from my own sources, I've heard they are stuffing one of their Taiwanese distributors. Granted there is a lot of short interest in nVidia, I'd still take that as a negative for the already bearish PC industry.