December 28, 1999. It has been a very good year. Will 2000 be just as good? It
might not hit the same results, but from my point of view, why not.
Tech stocks are golden. That is where the money is to be made. You just have to know where to
put it. That is why it will pay to read these articles posted several times each month. Am I patting myself on
the back? No, it's just that I have done a lot better than the many market guru's that have run mutual funds with
a YTD at about 6-10% and some have been at minus 20%. My YTD on all my recommendations are at 26.3%!
Market conditions swung to the internet side and have been proving to be "New Economy."
The NASDAQ market has outperformed the S&P 500 this year and could improve at an alarming rate. Tech stocks
could well be the most profitable in the history of business and the best part is that it will continue for at
least another 10 years, or more.
The tech sector was good from almost start to finish in 1999, with just a couple of minor set
backs. I do not see any hard times ahead unless the fed raises interests rates up 75 basis points for the coming
year.
There is no doubt in my mind that the internet sector will prevail for the future. You may get
some drawbacks here and there, but it's nothing to worry about. Two things that are important; one is a continuation
of the impact of the internet as it further evolves. Secondly, I look for international opportunities. The impact
of the internet is going to work its way through countries that are going to apply it to their own business.
I'm looking for a domestic growth rate of between 3 and 4%. If we do see inflation go up, it
would be a drawback for internet stocks, especially super high P/E-multiple stocks. This is the reason that you
do NOT put all your eggs in one basket. Keep a diversified portfolio at all times (which I have expressed for quite
awhile) and the downturn will not be that bad.
According to the market mavens, the tech's will be very cheap, if you can believe it. I do not
know if they are cheap at these prices, but it seems that the companies that are not in the black are getting those
high multiple's. Can you imagine what the price will be when they do start making money?
For the year 2000, I see a very favorable appreciation in stock prices if inflation does not
rear its head. The earnings growth should be about 15% which is conservative. Good growth and stable interest rates
are a definite plus for the markets. Stay tuned for my top picks for the year 2000.
Happy New Year!
George
