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Technology Stocks : Catalyst Semiconductor (CATS) -- What's New?
CATS 25.89+1.6%Jul 2 5:00 PM EST

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To: John Posatiere who wrote (199)11/19/1997 1:49:00 PM
From: slob   of 436
 
John, I invest in broken small cap semi companies.

This is an area where up-side potential is always high, the trick however, is to minimize your down side risk. It only takes 5 min. to run a search and find a long list of broken companies with potential. Consequently I spend most of my time looking at what could go wrong and what factors will trigger further losses. This enables me to exit early.

I have no position in CATS and I'm not going to take any position in CATS before the results come out. I expect CATS to drop when the results are announced, I want to know in advance at what level to set my buy. Thats what I'm trying to decide. Usually very negative results will force the price down below sensible levels. I want to be there at these level bottom fishing.

When I invest I'm looking for at least a 5 times return on any investment within a 1 year time frame. CATS is a company that fits this mold. It could easily be priced at P/S of 1.5, if it turns a profit. Thats 5 times todays prices, so at todays levels CATS is ONLY interesting to me if I can see a clear path to profitability. I don't see profitability within one year so I'm shopping at a lower price. Simple as that.

Slob

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