Shields Up In The Fullness Of Time 1995

December 31, 1995

New Year Rez is to never use Got or Gotten!

Three favorite words that our President loves to use are got, big and cut. My opinion is that the word, GOT, has to be the most annoying verb used. This problem is everywhere, journalists use it instead of more colorful language, advertisers use the word most of the time in adds that say "you've got it". Sorry, I do not want it or I probably have had it already and do not want it any more.

Yes, I choose throughout 1996 and beyond to use the word have, bought, received or any one of the other verbs existing in our language with more than three letters. I will try not to contribute to the homogenization of our language.

Another word used similarly is Tech for tech stocks. No longer can this sector be grouped together, especially next year. Even in the subgroup dealing with the new communication paradigm called the internet one can not talk generally. It seems the access providers are going to have margin squeeze galore in the near term causing the dead money effect for a while. Companies that provide the hardware and software infrastructure for the access providers should do far better and software companies providing security within this medium may also thrive. As far as baby bells, well, it is my opinion that they have to merge to survive the massive margin squeeze caused by the competition in the new technologies.

It seems people celebrated the birth of Christ this Christmas and are now shopping for the deals. Retail is not, was not, and will not be the meaning of Christmas. The whole industry has that and virtual malls to deal with in the future. Maybe community sports and games will be the future method to get out and be seen.

The current level of interest rates seems to be causing a lot more activity in the utility sector for they yield a very competitive rate and seem to have a good chance for capital appreciation. The Dow Jones Utility average has not reached the high established back in late 1993. I advise caution though, due to the brake in the brokerage stocks recently.

Next year should be another great time for common stock investments, only in the right stocks in the right sectors at the right time. Hedging previous gains is an important aspect of investing and may be needed throughout the year rather than selling out or going back down because of tax considerations. Our stock market probably still looks good to foreign investors due to the dollars stability and possible strength against their currencies in '96.

December 1, 1995

The Newtclear rally continues!

The real reason for the tech rally was not Windows 95 after all, but the improved communication developments created by the availability of the Internet. July to October was the period for the shift from the Windows 95 hype to the dynamic companies that are creating the infrastructure of this huge, expanding market area.

There is evidence that market psychology is changing towards a wage and commodity inflation scenario. The gold sector seems to be getting more interest with uptrends forming in many of the gold mining stocks. Silver and related stocks have been lagging but there are a few signs of activity. Also, with the Federal Reserve Bankers talking about wage pressures developing in the economy, the lower interest rate trend may stall and even reverse.

This situation will keep me out of intermediate and long term paper in addition to staying away from the utility, banking, brokerage and other financial sectors. True internet hardware and software providers will be a concentration area. Also, special situations in the pharmaceutical sector, gold mining sector, energy and commodity related stocks should be opportunistic.

Full caution for the general averages such as the S&P500 and 100 indices due to my belief that come January, a correction will finally happen similar to early in 1990. The January effect happened already by starting in October. It's over or very soon to be.