Roger's 1997 Short Picks Message Board

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Strategies & Market Trends : Roger's 1997 Short Picks

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To: Roger A. Babb who wrote (9168)	12/31/1997 11:13:00 AM
From: Dan Ross	Read Replies (1) of 9285

Interesting analysis..... My take is the following......If market valuations go back to their levels attained during the past 40 years, the DOW DROPS roughly 2500 points!!!!! How is that for a stat to chew on!!!! Valuations are too high relative to their growth......If you want to find companies that will get their butts kicked this year, short the market ..... SE Asia is real folks!!! Most of us know this but I want to let everyone hear it again before they go 100% long....I was talking to my father over the break about this whole debacle....He was commenting that his company made sales but didn't make profits in Asia due to the price competition for future growth in subsequent years......Incidentally, his company's sales will decline but profits won't in his opinion.......I would put my life savings behind what he thinks......He is right 110% of the time....no B.S..... Getting back to the point, I am looking for companies with a ton of SE Asia exposure....Most likely to get hurt this year are companies with low sales growth with high multiples....something like a P&G with a a ton of exposure overseas.....Gillette looks like a good short too.....consumer products will have to be priced higher (and out of price range of most customers) or the companies will take big hits from sales overseas.... One final point....I believe that we will see a lot of derivative news this year once again.....it is a cop out excuse for poor operations....I have heard that companies are active once again in the derivative markets in an attempt to offset lost sales.... Take care Dan Ross

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