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Blue Light Special: Tech Stocks to Buy at Deep Discounts
The stock market is in apparent free fall again this morning, with the Dow Jones Industrial Average down 387 points and the Nasdaq is off 56 points. Global markets are particularly hard hit, with Japan's stock index down 10% - at lows we haven't seen since 2003.
Weirdly, gold and oil are also down - just a complete selloff across the board. Traders are saying that today is the day that we finally might see complete capitulation - a day where investors cry "uncle" and sell everything. I though 7,000 - which would mean a 50% decline in the dow - would be an especially hard landing for stocks. Now I'm wondering if we won't go lower.
Here is what some trading experts have to say about Friday morning trading:
Dennis Gartman, editor of The Gartman Letters: "Madness. It's unlike anything any of us have ever seen before."
Art Cashin, director of NYSE floor operations for UBS: "What happens over the next five to eight days will be spoken about for generations."
James Awad, managing director of Zephyr Management: "We've surpassed the 1973-74 situation (one of the worst periods in stock market history). You're seeing a significant ratcheting down of expectations for worldwide economic prospects, which means earnings estimates have to come down dramatically."
In the tech sector, Google and Apple are being particularly hard hit, with a heavy wave of stock losses washing over into the biotech sector after Merck announced it was slashing jobs.
I'm not advocating jumping into trading today, although if you're a buyer, you'll have the playing field to yourself. But when the carnage is done, and it looks like we're facing the worst of it right now, stocks are going to become historically cheap in the next few weeks.
Two tech stocks that could prove resilient are that TV advertising odd couple, Microsoft and Apple. Microsoft is trading at $21.90 today, about 15% off its one month high. The company came out with a modest revenue statement yesterday, meeting Wall Street expectation but issuing a cautionary forecast going forward. In this trading environment, it's like Microsoft was giving away free computers with every share of stock. Investors are looking for any scrap of good news. So when Microsoft says business will be off in coming months, but not dramatically so, that is being construed as great news by tech investors.
Apple issued a downbeat guidance statement Thursday evening, and paid for it as the company's stock fell 13%. But as one commentator put it on an Apple investing blog, "Duh! Everyone is issuing downward guidance in the coming quarter." My thoughts exactly. Apple stock, which is trading at about $95 today and probably will go lower. But anything below $90 represents a great buying opportunity. Apple has $21 billion in cash and no debt on its balance sheet. It has the most popular multi-media tool on the planet in the iPhone. Even its computers continue to sell relatively well.
Both Microsoft and Apple are being penalized for all the fear and loathing in the stock market this week. By this time next week, if we live to tell the tale, both stocks should be in the "too good to pass up" category.
Weirdly, gold and oil are also down - just a complete selloff across the board. Traders are saying that today is the day that we finally might see complete capitulation - a day where investors cry "uncle" and sell everything. I though 7,000 - which would mean a 50% decline in the dow - would be an especially hard landing for stocks. Now I'm wondering if we won't go lower.
Here is what some trading experts have to say about Friday morning trading:
Dennis Gartman, editor of The Gartman Letters: "Madness. It's unlike anything any of us have ever seen before."
Art Cashin, director of NYSE floor operations for UBS: "What happens over the next five to eight days will be spoken about for generations."
James Awad, managing director of Zephyr Management: "We've surpassed the 1973-74 situation (one of the worst periods in stock market history). You're seeing a significant ratcheting down of expectations for worldwide economic prospects, which means earnings estimates have to come down dramatically."
In the tech sector, Google and Apple are being particularly hard hit, with a heavy wave of stock losses washing over into the biotech sector after Merck announced it was slashing jobs.
I'm not advocating jumping into trading today, although if you're a buyer, you'll have the playing field to yourself. But when the carnage is done, and it looks like we're facing the worst of it right now, stocks are going to become historically cheap in the next few weeks.
Two tech stocks that could prove resilient are that TV advertising odd couple, Microsoft and Apple. Microsoft is trading at $21.90 today, about 15% off its one month high. The company came out with a modest revenue statement yesterday, meeting Wall Street expectation but issuing a cautionary forecast going forward. In this trading environment, it's like Microsoft was giving away free computers with every share of stock. Investors are looking for any scrap of good news. So when Microsoft says business will be off in coming months, but not dramatically so, that is being construed as great news by tech investors.
Apple issued a downbeat guidance statement Thursday evening, and paid for it as the company's stock fell 13%. But as one commentator put it on an Apple investing blog, "Duh! Everyone is issuing downward guidance in the coming quarter." My thoughts exactly. Apple stock, which is trading at about $95 today and probably will go lower. But anything below $90 represents a great buying opportunity. Apple has $21 billion in cash and no debt on its balance sheet. It has the most popular multi-media tool on the planet in the iPhone. Even its computers continue to sell relatively well.
Both Microsoft and Apple are being penalized for all the fear and loathing in the stock market this week. By this time next week, if we live to tell the tale, both stocks should be in the "too good to pass up" category.
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