"All of us have known that these high-flying Internet stocks will fall, so why are we really surprised?" says Hugh Johnson, chief investment officer at First Albany Corp. He, for one has been advising clients to lighten up on stocks, take a more defensive posture and never own more than 5% of the total portfolio value in Internet stocks.
The next 12 hours would be a blur of meetings: a foreign dignitary, a "stock taking" on some policy or other, a furious delegation, a crisis-management session.
Among the offerings on the list is the $2.6 billion issuance announced by All Nippon Airways on July 3. Filings made with the Tokyo exchange show short-sale positions on the stock taken out in the name of Nomura, starting June 25, eight days before the announcement, and in the name of Goldman beginning a day before.
After all, even for an independent-minded analyst, slapping a "sell" or "underperform" rating on a stock takes fortitude: In doing so, an analyst risks that the company could shut him or her out and not be as forthcoming with information that would help construct price targets.
On Tuesday, the stock took a hit.
On Aug. 12, Clorox stock took its biggest hit in 19 years, dropping 16% to 86.44 on the New York Stock Exchange.
On Friday, Goldman's stock took a beating, falling 13 percent and wiping out more than $10 billion of the company's market value.
Google falls short on expectations and the stock took a dive.
"We sell when a stock takes on the characteristics of a momentum stock, if the fundamentals stop improving, or if our thesis proves wrong and we throw in the towel," he says.
Last January, the stock took off on news that the company had signed a sales agreement with Nortel.
Following an April 1999 public offering Heidrick stock took off on an Internet-style tear, its shares quintupling to $72 in just a year.
