The Week ahead

Are we there yet?

Everyone is predicting some portion of the Trillions of dollars in money sitting on the sidelines of the market is going to get invested this week. What many people think is that there will be a steady stream into the market. A little bit in this week and a little the next. Some kind of steady flow that will make every investor happy.

Quite simply, I do not believe in that kind of market. We are in the information age and when there is definite proof the recession is over, lots of money is going to flow into the market. Though many technology stocks had pretty good years in 2001, there are still lots of bargains out there.

What seem to have been the case so far is that those companies with consumer input have recovered first. Witness pretty good years in 2001 at Microsoft and Dell. Those that have lagged behind are those more dependent on corporate sales like Oracle Corporation have lagged behind.

Interestingly enough the drop in my Oracle shares last year matched on a percentage basis to a very good year in my Dell shares. Since I hold both companies in equal proportion, I went nowhere in 2001. Not too many people buy products from Oracle at Best Buy.

For a sustained broad based rally in the stock market, there will have to be a recovery in corporate spending. Don't look for the battered broadband market to come back quickly. There is still a lot of over capacity there. Look for the more traditional areas to see money first. The Dell's, HP's and Compaq's of the world. More computers mean more routers so eventually though later, Cisco and Juniper might benefit.

Another area to watch in 2002 is the figures on 2001 Internet sales. If those sales figures are truly as good as they seem, look for companies like Oracle to benefit. The number one database in e-commerce is Oracle, mated up with their almost secure Internet Application Server.

2002 could be the year that Internet gets into a normal, sustainable growth for this field. I am not recommending stock purchases just yet, but this is place to keep a sharp eye out.

Good luck in 2002.

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Shmuel Protter
investmenttool.com