My But What a Big Bear!
Some random thoughts:
1. We will have an economic slowdown. If something stupid happens (in the middle east or the balkans) we could see a recession.
2. Nominal interest rates will have to come done (if they have not already - by defacto or in fact).
3. The Loise Yamada pitch of the magnificent big caps with their global exposure and their tie in to a booming world trade will now work in reverse - as a decellerator for the big caps.
4. The technology industry will take a hit. It has already started with the chipmakers. Next up are the hardware types then the software and finally the services. Between the slowdown and the dumping going on from asian producers, this fate is sealed.
5. The advantage (as I read recently) will go to the domestic service oriented business.
For Ampex:
1. Even though they ship products, Ampex is more of a value added service firm in a specialized market niche.
2. If Ampex drifts to a net presence strategy (a uniquely US phenomenon), then the service orientation is even stronger.
3. As far as the acquisition strategy is concerned, Ampex is now in the drivers seat. Cash, a plan (please please), and financial wherewithall. Believe me, most of these tech company targets have great ideas but they have no business sense. What keeps them alive is a rising tide when it is there. OK, I'll come out of the cabinet and admit to being an IT industry worker.
4. Last month we had the funds dumping, this month we have the small over-margined investor dumping. All of this is taking place in the presence of a virtual information vacuum. I've been reading a little chaos theory lately and this downward spiral in the presence of no information is considered a dampening pump. It results in collapsing prices with no apparent explanation. As soon as positive information comes forward, the pump works in reverse, feeds upon itself and prices are jacked up beyond sustainable fundamentals. A constant flow of information (except for surprises) and analyst presence tends to buffer these effects with a well followed stock. With a micro, who knows?
5. I'm going to say bid 1 15/16 for the low to occur sometime over the next 4 market days.
6. AXC has been following a well defined channel since Feb 98 and has been drifting to the lower range of the channel since June. It is presently in a spillover position but the accompanying short term indicators are showing oversold and rebound being attempted. If one could subtract out the forced selling, then we would probably be seeing at least 1 1/2.
7. Going forward, at the present time, I'm not unhappy about being housed in a hammered down value stock with an information problem but flush with cash and with an ultra conservative financial type at the helm.
Ed Perry |
