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Strategies & Market Trends : Sharck Soup

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To: American Spirit who wrote (20745)	5/6/2001 10:21:19 PM
From: Bid Buster	Read Replies (1) of 37746

AS, i just got your pm's asking about UCL...your methods of research strike me as lacking any thoroughness. from your statement that UCL is near it's low makes me think you need a new quote provider as UCL is only $3.50 off it's 52 wk high. P/E's are only one of many indicators to establish fair value of a company, to use P/E alone is just foolish. but to answer your question about hedging let me give you an obscure example and see if you can figure it out...lets say i'm a shrimper and i want to "hedge" my bets on the upcoming shrimp season so i go buy some shrimp calls..if i have a bad shrimping season, i recoup my operating losses from from the calls that will go up in value due to supply not meeting demand...if i have a good season i'll make money from the shrimp i catch while the calls expire lower or worthless..the hedge works as long as it's balanced correctly...but because i'm mitigating risk i'm also reducing total return due to one side of the hedge loosing.....now do you see how that can be applied to UCL?..and the next step in your research should be to find out what kind of hedge UCL has....good luck.

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