Pancho,
A few more down days and the junk stocks will hit the skids. I think you've got a bunch of momentum junkies who are dyeing for a fix. When these junk stocks start really falling, they'll fall fast. I don't think that they can survive more than a few days of declines. The question is whether there will be a sharp enough correction to flush these guys out.
There's been a lot of sector rotation lately. Unfortunately, two sectors which are unbelievably hyped right now are Internet and y2k.
BTW have you checked out TALK? P/E = 300, P/S = 6.3 Gave AOL $100M to hawk their ATT leased long distance service. I've located $30M in their 401's, but $70M is missing in action. TALK used to sell their "services" through telemarketing, but now depends solely on AOL. They probably got some business at first, but after a while AOL ads must lose effectiveness. Also, ATT is warning about slamming (changing customer's long distance carrier without permission) and threatening to end selling of time to guilty parties. Are they pointing the finger at TALK? I don't know, but TALK responded, so it sounds like they feel a little threat there. Also, they are trying to sell the company. Who's going to buy a company whose only real asset is an advertising agreement with AOL?
If you've got some time on your hands, I'd really appreciate a professional opinion on their P&L. Where did that pesky $70M go? |
