C-Cube Message Board - Msg: 2901724

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Technology Stocks : C-Cube

CUBE 36.65

-0.7%

3:59 PM EST

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To: BillyG who wrote (26261)	12/7/1997 6:37:00 PM
From: Rarebird	Read Replies (7) of 50808

Cubes recent slide is not a buying opportunity: Why are the currencies in many Asian countries under pressure? There are many reasons but the main ones are over-speculation in the real estate and stock markets. That has raised doubts about the abiliy of businesses in those countries to pay off loans backed by those assets; if the assets crash in value, they're more likely to default. This fear has caused capital flight, which put downward pressure on currencies. There are huge property bubbles all over the region. The real big problem here is that the ruling class is tied up in the real estate bubble. How can they make a serious policy response? 1998 earnings in the region are a BIG QUESTION MARK! It's hard to value anything there now including the US multinationals that do business there. Businesses are selling at fire sale prices just to pay off debt. Hong Kong may be next. To be sure, Hong Kong has alot of reserves, about 63 billion US dollars. Moreover, China has said that it would help defend the Hong Kong dollar, and they have about 120 billion dollars in foreign reserves. But there is no GUARANTEE HERE! China may give up after awhile. All of these countries in the region are tied to Cube's fate because thay will most likely force China to devalue its own currency in order to compete. Let's try to get real here about the effect of a currency devaluation in China on Cube. It will HURT CUBES EARNINGS BIG TIME. Why? Because profits made in those countries count for less when translated back into dollars. My disagreement with you is primarily one concerning the role and function of the stock market in evaluating a company. As a citizen of the world, I have a global and transcendental consciousness which I utilize to evaluate a company like Cube. You see only its technology. Fortunately, the stock market is much more profound and metaphysical than You! For the selling of Cube is based on genuine global considerations whose projected effect is presently being priced into Cubes stock price. The selling isn't over and the bad news is not out yet. There is much too much uncertainty and risk to be buying Cube at this time.

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