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With corporate results coming in far better than expected the stock market is acting very sluggish. Not only are companies beating expectations, they are stating there are better results to come in the future.

Since most directors underestimate future growth on the low end, one can assume that if nothing changes the next few quarters are going to be great but stocks are not yet reflecting this fact.
The hi-tech sector has stalled at this moment in time. Many stocks are consolidating at low PE multiples.

Intel (NASDAQ:INTC) has a PE around 10 times earnings and if it only goes up 30% the PE will still be very low for such great value/growth stock. The same goes for Microsoft (NASDAQ:MSFT), Cisco (NASDAQ:CSCO), Oracle (NYSE:ORCL) and a host of hi-tech companies that are beating expectations.
At some stage, investors are going to realize the under valuation of so many great companies.
If the realization hits home all at once, then a melt up of stocks is possible with flash trading going parabolic in the opposite direction from the last flash crash. This time it could be a flash trading into sky high levels.
If the shorts are caught napping by looking at housing and job growth, they may suffer a massive fall and be forced to cover margined short positions.
Time will tell if low valuations and savvy investing wins over negative propaganda.

Disclosure: Long INTC, MSFT, CSCO, ORCL

Source: Watch Out for a Possible Melt-Up