The Chart du Jour

The Patient that Died

May 10, 2001

By, Barclay T. Leib


Chart produced using Advanced GET End-of-Day

If you know anyone out there espousing the words "normal correction in an ongoing bull market," just show them the chart above. Is there any denying that we just experienced a bubble of the most magnificent magnitude, and that it has now popped?

Using alternative imagery, the patient has had a heart attack, and is now dead.

Investors have seen no less than $4.7 trillion evaporate from their portfolios -- an amount InvestTech Research points out is 1.5 times greater than the value of all stocks in January 1991!

And yet the Wall Street Journal recently ran a story entitled "The Recession that Wasn't." 15 of the 17 greatest gains in Nasdaq history came this past April, and analysts on CNBC talk about a normal "inventory correction." It's almost as if there is a conspiracy to continue propigating a false myth.

As Fred Hickey of The High Tech Strategist so ably points out, there is nothing normal about Cisco's current inventory problems. Cisco's inventories currently stand at four-and-a-half times where they were last year, and as Cisco writes-off and works down this massive overcapacity, guess what? Other companies supplying to Cisco further down the food-chain are going to have virtually no new orders for the rest of the year. Component suppliers and semiconductor manufacturers alike have basically lost their biggest customer. The patient has died, but no one dare hold the wake for fear of advertising this disturbing fact.

On Cisco itself, and drawing a few pivot lines using some old highs and lows that suddenly seem to matter again, we'd guess at the forthcoming 6-month range for Cisco of $11 to $22. Trading at just above $19 at present, Cisco is anything but a bargain. Instead it may slowly be melting the hopes, dreams, and savings accounts of many neophyte American households.

How about we roll some early 2000 videotape from CNBC and see if there isn't any fodder there for a fun class action lawsuit? Those bimbos certainly deserve it for the added hype they wrought.


Non-subscribers are invited to sign up for a quarterly subscription below. Sand Spring's latest subscriber-only article "Expert Short Picks," as well as our prior February 20th article "Measuring Financial Time: The Magic of Pi," will both be accessible on the final page of the order process. A user-id and password for web access to all past and future articles will then follow by e-mail.

It may also be of interest to some that because so much time (and thus timeliness) has now transpired, we recently released three of our 2000 subscriber-only articles. These now appear under the public Earlier Articles section of the website. Perusing through them may give one a sense of the added premium level of analysis we provide to subscribers.


How Your Articles Are Delivered
Upon the processing of your credit card or the receipt of a personal check, Sand Spring will e-mail you the articles requested as a Word attachment, and also provide you with a WWW address and password to view the article on the web without using Word should you so desire. Confirmation of your order will be immediate, and the actual article will follow by e-mail typically within a few hours and in all cases before the opening of NYSE trading on the following day.

Ordering by Credit Card:
Our shopping cart is designed for both physical and subscription products, so do not be confused too much when it asks you for a shipping address. A correct address is important only for credit card authorization purposes. Your e-mail information is the most important piece of information to us for proper delivery of your article(s).

Disclosure Statement

Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.


If you order by credit card, your credit card will be billed as "Sand Spring Advisors LLC"

Should you have any ordering problems, please contact us at
973-829-1962 or by email at the address below:

information@Sandspring.com


Take me back to the Sand Spring Home Page


Comments or Problems


Thank you for visiting Sand Spring Advisors LLC, Inc. We hope to hear from you again soon. For more information on Sand Spring Advisors actual programs, services, or to request a copy of a Disclosure Document, please phone us at 973 829 1962, FAX your request to 973 829 1962, or e-mail us at
information@Sandspring.com

Corporate Office:
10 Jenks Road,
Morristown, NJ 07960
Phone: 973 829 1962
Facsimile: 973 829 1962

Best Experienced with
Microsoft Internet Explorer
Click here to start.

The material located on this website is also the copyrighted work of Sand Spring Advisors LLC. No party may copy, distribute or prepare derivative works based on this material in any manner without the expressed permission of Sand Spring Advisors LLC

This page and all contents are Copyright 2000 by Sand Spring Advisors, LLC, Morristown, NJ