Today was very nasty. It was worse than a spanking. It was an old fashioned size 13 EEE in the rear. This is what happens when through the mystery of mob psychology, there is a sudden mind-set that a lot of stocks are too expensive by any historical measurement. Of course, the Bears have been saying this for years, only to find the Bulls pouring in overwhelming amounts of money, putting the Bears in full retreat.

Historically, the market is down in the Spring, reaching a seasonal bottom around June 25. At least at that time, investors start to anticipate positive earnings reports starting around July 10. Hopefully, there will be few negative pre-announcements to unsettle investors. In the meantime the old favorites will have a tough time. They are great stocks, but this isn't their time for now. Resist the temptation to buy in too soon, as you probably will get better buying opportunities in the weeks ahead.

One group that has been hammered in recent weeks are the INTERNETS. Today just added to the disaster. In case you haven't kept up with this budding fiasco, look at what's been happening:

Gee, buying INTERNETS is so exciting. I wonder how many ordinary guys and gals turned market experts, who quit their jobs to trade on-line, are having a great time? Not too many I suppose, but I'm sure they're having plenty of excitement. When you lose your shirt, it always gets your attention. Yes sir, as a wise man once told me, when the tide goes out, you know who isn't wearing a bathing suit.

For the rest of us, caution remains in order. Although I think that the market will be higher than now at year-end, we could have some choppy times between now and then. Remember that the ball game for the old favorites is temporarily over, so don't jump at the first "bargain" price. Patience should be rewarded, and that means that accumulating a little cash won't hurt. Stay tuned.

The Market Pro - May 24, 1999