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Strategies & Market Trends : Steve's Channelling Thread

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To: mishedlo who wrote (28974)	9/27/2001 8:26:29 PM
From: westpacific	Read Replies (2) of 30051

AVCI is a case like so many others. The problem I see, and I hear what you are saying as I see many that are just asking to be bought, is this. You just cannot be sure how long these companies may go without selling any or much product. How long can they last on a cash burn basis. IMO it is just so hard to determine. Many of these companies will declare BK. The big question is do you want to be stuck holding one if that happens. I really feel these next gen plays are frought with risk here. We need to get to some sort of bottom within the overall market and see whom is left standing. I do not see any bottom fishing for at least six more months or so. The PE on the S&P needs to be trading at 10 before you want to buy any of these former high flyers. Otherwise it is gambling and in this market, with so many incredible things going on, you just cannot risk your capital in that way. Remember PEs are coming down weekly, companies that buy these products are in survival mode now. This is not about growing anymore but being alive on the other side. The cycle will continue to spiral down for sometime to come. Do not forget this fact. All the best West

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