Message-ID: <21134194.1075855627359.JavaMail.evans@thyme> Date: Mon, 20 Nov 2000 11:58:00 -0800 (PST) From: sivy@listserv.pathfinder.com To: sivy@listserv.pathfinder.com Subject: Sivy on Stocks: From Sivy's mailbox Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Sivy On Stocks X-To: SIVY@LISTSERV.PATHFINDER.COM X-cc: X-bcc: X-Folder: \Peter_Keavey_Dec2000\Notes Folders\All documents X-Origin: Keavey-P X-FileName: pkeavey.nsf ********************[ A D V E R T I S E M E N T ]**************** Like the diversification of mutual funds but not the fees and taxes? Try FOLIO investing and easily buy portfolios based on indices, sectors or any group of stocks you like, even the Money 30. All for a flat fee of $29.95/month. Click for FREE 30 DAY TRIAL! http://www.foliofn.com/content/lp/lp.jsp?id=monyem00031000y ***************************************************************** SIVY ON STOCKS from money.com November 20, 2000 ========================================= Monday, November 20 at 8:00pm ET Money.com presents Ron Insana, co-anchor of CNBC's Business Center and author of The Message of the Markets, in a chat about today's turbulent market. AOL users go to Keyword: Live http://www.money.com/chat/ ========================================= From Sivy's mailbox Here are my answers to recent e-mails about tech, telecom, John Malone and junk bonds. By Michael Sivy I've been receiving a lot of e-mail lately about both the election and the carnage in tech stocks, and it's hard to say which upsets readers more. The one thing that seems fairly certain is that neither is over yet. The Florida Supreme Court may force a decision on the election before Thanksgiving -- or the legal wrangling may continue for several weeks. Either way, we're looking at gridlock in Washington. That means the surplus will balloon, as increases in government spending and tax cuts are both stymied. The swelling surplus could reduce the outstanding volume of Treasury bonds by as much as 15 percent over the next couple of years. That would be very bullish for all high-quality bonds -- Treasury, agency, blue-chip corporate and municipal. On the other hand, using the surplus to reduce debt instead of spending it (or returning it to taxpayers who would spend it) would sap the economy's energy. That could mean more earnings disappointments from economically sensitive companies over the next couple of months. In the long run, though, gridlock could lay the foundation for a resumption of the stock market boom. Debt reduction and an economic slowdown will probably encourage Fed chairman Alan Greenspan to cut interest rates substantially next year, which would be a boon to the overall market. Now here's a look at some specific questions: What's up with Cisco and Oracle? The Nasdaq has been getting walloped and is now down 40 percent from its highs. I've said that the damage to the tech sector isn't over and that the group may not rally as usual going into the new year. Earnings fears are the chief cause of the selloff. In addition, the most popular tech stocks on the Nasdaq, such as Cisco and Oracle, carry P/Es as high as 50. I imagine that there will be a great buying opportunity for these stocks -- but they could get cheaper still. When are the big telecoms, such as AT&T, WorldCom and Lucent going to come back? I've recommended all three of these stocks as value buys (see "The shining" [ http://www.money.com/money/depts/investing/sivy/archive/000731.html ] and "After the tech wreck" [ http://www.money.com/money/depts/investing/sivy/archive/001101.html ]). And though each has since dropped, I still believe each has asset values at least 50 percent above current share prices. But in this environment, they probably won't rebound quickly. If I already owned them, I'd certainly hold them. And I'd consider buying now, though there's no rush. Lucent looks like the most straightforward play, followed by WorldCom. AT&T presents the most potential problems. What's going on with Liberty Media and why can't I find the ticker symbol? I've recommended Liberty Media Group a couple of times (see "The media master is back" [ http://www.money.com/money/depts/investing/sivy/archive/000927.html ] and "Leader of the free world" [ http://www.money.com/money/depts/investing/sivy/archive/001110.html ]). Since AT&T acquired cable TV giant TCI, Liberty's programming operations have traded as an AT&T tracking stock with the symbol LMG, class A. On some quote systems, the symbol is given as LMGa, on others as LMG_A. If you can't find it, try the MONEY.COM Website, where the stock is LMG.A [LMG.A]. To my mind, the case for Liberty is the case for John Malone. He was the master of the industry back when he was CEO of TCI, but he nearly disappeared from view after the acquisition. Now with the spotlight back on Liberty, Malone has the chance to be a player again, particularly since AT&T has announced that it intends to spin off Liberty as an independent company. If the slowing economy is bullish for bonds, why is my high-yield bond fund down almost 10 percent? The slowing economy and the prospect for lower interest rates are extremely bullish for bonds of unquestioned financial strength. Junk bonds suffer in an economy slowdown, however, because investors worry that the companies' chances of default will increase. If you own a junk mutual fund, though, I'd hang on at this point (I have a junk fund too and I'm down nearly 10 percent). The worst of the decline is most likely behind us, and junk bonds can rally powerfully after an economic slowdown ends. ### Post your comments on Michael's column at: http://www.money.com/depts/investing/sivy/index.html To subscribe or unsubscribe to Sivy on Stocks, go to: http://www.money.com/email/ Earning Releases and Calls For the latest corporate earnings releases and online conference calls click on: http://money.ccbn.com * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Special Internet Offer!!! Sign up for a RISK-FREE issue of MONEY MAGAZINE at http://www.money.com/subscribe2 Or if you prefer call our toll-free number 1-800-544-4594 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * We may, from time to time, contact you with offers for Time Inc. products and services which we think may be of interest to you. If you would prefer us not to contact you in this manner, AND YOU DID NOT INDICATE THIS PREFERENCE AT THE TIME YOU SIGNED UP for the Sivy on Stocks online newsletter or any other Time Inc. online newsletters, please let us know by sending us an e-mail at . Additionally, from time to time we may provide your e-mail address to carefully chosen companies whose offers we think may be of interest to you. If you would prefer us not use your e-mail address in this manner, AND YOU DID NOT INDICATE THIS PREFERENCE AT THE TIME YOU SIGNED UP for the Sivy on Stocks online newsletter or any other Time Inc. online newsletter, please let us know by e-mailing us at .