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Technology Stocks : Applied Magnetics Corp

APM 1.560

+15.6%

3:59 PM EST

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To: Don Earl who wrote (11023)	12/15/1997 8:38:00 PM
From: SeanS	Read Replies (1) of 12298

Don, Are the loan instruments denominated in local currency or U.S. dollars? If APM borrowed the amounts in dollars, then no matter what the exchange rate, APMs' debt would not be affected. I have an idea about the reason that some of the technology stocks keep getting hammered. I know everone knows about the Asain troubles and the oversupply problems. But, people seem to be overlooking the huge amount of tax selling that is most likely going on. Let me put it this way. Normally if I am holding a stock that is down because of weak fundamentals going into Dec., I might be tempted to unload it for the tax writeoff. But, I might hesitate if I thought that it might rebound in the next month before I could buy it back and still take the loss. In the situation that we have now there is almost no risk of that because so many stocks in similar companies have been beaten down by approx. the same percentage. This removes alot of the risk of tax selling. If I sell and lock in the loss now and the sector starts to rally next week, I can still take my pick of companies that will rally about as much or more as the stock I unloaded. This way I can eat my cake and have it too. Does this hypothesis make sense or am I missing something? If I'm correct, we should see at least a modest tech rally once tax loss season winds down.

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