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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (801)	5/20/1998 1:02:00 PM
From: Arthur Tang	Read Replies (1) of 1471

Investments are based on management ability. If they falter, your stock will suffer. Recently, Chain saw Dunlap had a problem with Sunbeam and the stock was punished. Fundamental problem he had was "no firm plans of product obsolescence and replacement". Sales revenue suddenly dropped with no new products to take up the slack. His marketing and sales team was not prepared and was not strong enough to tell the boss they need more products to replace what is in the channel. Recently, AMES hired a new CFO, and the spending went way up. The spending could have wiped out the profits of an entire year. The first quarter went into deficit spending. What can stockholders do? Let them have it. Never pamper management, they earn enough to do the job for stockholders. Always keep them on the defense so that you don't have to take a loss on your investments. Reduce spending! Improve gross margin! Then some day maybe expand the operation but never to risk the hard earned investments.

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