Sector Investing

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I recently involved myself in a financial discussion with a friend of mine in which I stated that the recent rise in the stock market is no longer supported by rising earnings but rather hopes that growth in earnings will resume. This is happening at the same time as the market was rising to new highs. Last month of course we actually got something of a pullback. This might not be the beginning of a larger sell off but when a rising wedge breaks out to the upside this is often a warning sign seen at the end of a move before a deep sell off begins. Page down to rule 4:

http://www.siliconinvestor.com/readmsg.aspx?msgid=28770834



Don's comments from the last couple of months on his tables suggest that he too is concerned with the slowing of growth in actual earnings in the semiconductor space:

http://www.siliconinvestor.com/readmsg.aspx?msgid=28962899&srchtxt=Bookings%20Billings

http://www.siliconinvestor.com/readmsg.aspx?msgid=28912162&srchtxt=actual%20earnings

Considering the fact that the P/E ratio on the S&P 500 is actually rising for the first time in a few years due to an overextended stock market and slowing earnings growth I think being careful with our investment dollars is more important now than at any other time over the last 5 years:

http://www.multpl.com/

RtS