The New Economy 2.0: IWO and the IWN

Discussion in 'Stocks' started by michaelscott, Jul 19, 2007.

  1. There is a huge picture that is coming into play. The IWM is looking a little toppy, but is it really toppy? The IWO is breaking out while the IWN is breaking down.

    Everyday for the last some odd weeks, I have been watching how each of these ETFs have traded and closed for the day. The growth ETF always seems to come out strong while its value counterpart seems to lag.

    Cramer stated on television the other day that this is like 1995 and I would have to agree with that assumption. Growth is back and for value its time to say goodbye.

    When I was in the bay in 2000, rents were extravagant. $2000 a month for a small trailer park home in Mountain View. Now I just read that rents are sneaking back up again with the average apartment being $1600/month in good ole Mountain View. The tech companies are starting to hire again once more.

    This tells me that its time again. New Economy 2.0. This is just like the late 90s where value is sneaking its way out of the picture and growth comes into play. Technically speaking, the IWO has a lot more room to run as it broke out over its multiyear cup where as value appears to have had a nice run and its time to throw the blanket over it.

    The insurance index, a typical value play, is chopping and receding. All-State is down 10% for the year and Progressive isnt doing much better. Both these stocks were so nice to short from 1997 to 2000 and then to long in March of 2000

    For some folks, shorting a stock like ALL and longing a stock like AMZN is not something they are comfortable with. AMZN seems so overvalued with its 123 P/E and ALL seems like a bargain with a P/E of 7. However, that will be the new normal in the years to come.

    I said to short RIMM a while back, but I wasnt looking at the larger picture. Overvalued growth stocks is the new normal, the new economy 2.0. These growth stocks will go up until they wont and the value stocks will go down until they wont.

    I see a long-short strategy here. Long growth, short value...
  2. Why not start a journal and post all of your "ideas" there instead of starting a new thread for each and every one of them?
  3. Russel indexes have underperformed in the past year

    Large cap stocks are the best for now.