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Strategies & Market Trends : Value Investing

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To: Bob Rudd who wrote (12268)	4/3/2001 5:46:49 AM
From: Dale Baker	Read Replies (1) of 78744

To me, AREM's recent drop is proof that all the hot air on Wall Street about fundamentals and earnings is total crap, at least for the small caps. Auric Goldfinger slammed AREM several times on SI - it is widely known that he runs a hedge fund. And the hedgies tend to run in packs. Of course, Goldie couldn't read the 10-K accurately concerning AREM's geographic distribution, but hedgies only care how the share price moves. The selling has been peculiar in that the sellers sit on the ask through INCA and dump thousands of shares without moving up. If I were a trading desk trying to work large blocks for a fund, I would move up the ask to maximize my average price. OTOH, if I were shorting the stock and wanted to keep the price down, I would do just what I have seen on INCA. The short interest numbers are too old to be useful. It's likely the funds are selling some. This is the only business I know where major players systematically undermine the value of the assets they need to generate revenues from customers (i.e. funds dump large blocks and crater stock prices). I plan to hold AREM for as long as they execute well and remain undervalued.

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