Hi Bruce,
Were you able to get the Newport files transferred to the new hardware okay? I may not be as much of a "Ticker Addict" as I used to be, but I'd miss not looking through my AIM graphs once a week.
I was darned near tradeless last week. Didn't like that much at all, so my mind started creating some fiction for April 1st. Just yesterday AIM and I managed to part company with a few shares of IKN at $35-3/8. I still don't have a feel for what this stock's potential is yet. It's been a "good news/bad news" joke for me for a year. I've owned the stock from which this company was formed longer than any other in my portfolio. My cost basis is about $3/share, so it stings on a Capital Gains basis each time I part with a few shares. That's part of the "good news/bad news" with the other part being that it peaked in value in the $40s or maybe even the $50s at the time the company split into two pieces.
At the time of the split-up, I sold off hefty amounts to raise the cash I felt the new outfit might need. the older company had been quite low BETA and hadn't required much Cash Reserve. This newer entity looked like it might. More "good news/bad news." Good news is that the cash was put to good use as the price declined into the low $20s during '97, the double bad news is that I could have sold out of it at significantly higher prices, and that I'm now writing a check to Uncle Sam for the shares I did sell!
I had artificially depressed the first Buy orders on IKN by pushing the Buy Resistance way up. I didn't feel that the company was reasonably priced at the time of the split-up. This turned out to be "good news." At first I thought I'd been too conservative, but after a short while it appeared that the guess was right. Once the AIM buying started, it did a good job of accumulation a more reasonable prices. Now, I'm harvesting some LIFO profits along with the benefit of lower FIFO taxes than a year ago.
If Mr. Buynhold had owned the parent stock, he'd still be licking his wounds, but he'd owe no taxes. He'd just have less total value. My guess is that there were also plenty of Mr. Daytrader's out there that were sucked into the momentum of the pre-split stock's performance.
In both cases, there's long faces!
So, the good news for me is that I took some money off the table and have been able to reuse it profitably with AIM. Yes, there was a tax penalty, but at least the whole pie didn't go half-bad like Mr. Buynhold. The momentum player also got burned, but most likely realized his loss last year for tax purposes.
AIM and I are still in the game, as the warehouse's inventory adjustments took care of most of the upset. Damage Control is over and now the task of evaluating the company for long term potential remains.
It will be interesting to see what a year of "seasoning" has done for this company.
Best regards, Tom |
