Are the investment waters safe again? The Nasdaq composite index had its best week in history last week as investors went diving into technology stocks. Those same technology stocks buoyed the Town Crier Index more than 22 percent for the week.
Investors had abandoned the financial waters during the month of May amid fears the jaws of the wealth-destroying Federal Reserve was looking to bite into more portfolios.
Several major financial houses spread the word their assessment of the Fed’s interest-rate increases are biting deep enough to slow the economy and the Fed will call off its mission to raise interest rates in June.
Stocks on the Town Crier Index last week:
Adobe Systems was up 21.51 percent. Agilent Corp, 25.77; Applied Materials, 27.62; Cisco, 17.18; Coherent, 23.05; Harmonic Lightways, 49.01; Intel Corp,, 14; KLA-Tencor, 35.35; LSI Logic, 36.01; National Semiconductor, 39.12; Sun Microsystems, 20.14 and Yahoo!, 20.2 percent.
Stock Market volatility creates unpredictable movement. The Town Crier index investment of $50,000 ($1,000 in each of 50 stocks) went from a loss of $2,000 two weeks ago to a profit of $9,365 last week. Since Jan. 1, the Town Crier index is up 18.73 percent.
Although bargain hunters keep diving into investment waters, it doesn’t take much volatility for sellers to get out of the waters.
Savvy investors will use price declines to add quality stocks to their portfolios and that is exactly what happened last week on the Town Crier stock index.
Earnings will always be a good indication of a stock’s value. Intel Corp. is an excellent example. On Jan. 1, Intel was priced at 82 5/16 and last Friday the price was 134 3/16, A 63 percent increase in value.
The giant chip maker sparked a technology rally when it announced a $2 billion expansion at its New Mexico manufacturing plant. The company has made faster-than-expected progress in the micron manufacturing process technology resulting in higher yields on Pentium production. For the full year 2000, earnings estimates increased to $3.10 per share. That’s good value in a stock.
Noel, a seasoned investor, writes about the stock market for the Town Crier.
