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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: rsie who wrote (2468)12/14/1998 4:30:00 PM
From: Justa Werkenstiff  Read Replies (7) of 15132
 
Rich: The nature of the semiequips forces people to trade them IMO. You can hold them IMO when there is a clear cycle upturn and momentum in bookings creates those words that make analysts salivate: "sequential earnings growth." Translated, that means momentum. You just sit back and enjoy the ride up thinking about when to get out. Here you can be a holder for awhile anyway.

There is no clear trend in bookings growth at this time as you know. We may be at the beginning of such a period if the anecdotal evidence holds, but the valuation on these issues, especially the large caps, looks pretty expensive at this point in the cycle.

Brinker has never discussed an exit strategy on these stocks to my knowledge. I hope he does discuss that issue when we get a sustainable trend in bookings.

As far as BTB goes, that is really a lagging indicator IMO as to when to get out of these stocks. Sure, it is something to look at but the stocks will have already corrected a good deal before you see it in the BTB. Utilization rates is something to look at as well as insider sales, secondary offerings in the sector, and historic valuations at peaks which I think will have to be adjusted upwards this turn around because of the overall higher valuation in the market. Resign yourself to the fact that you will never sell at the top.
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