Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: JOHN CHEN who wrote (16662)	1/7/1999 4:35:00 PM
From: BelowTheCrowd	Read Replies (1) of 18691

> I don't see any bad things coming out for at least several years to come Their latest earnings "pre-release" basically stated that: Revenues were up something like 350% over last year, making a record, but overall margins were not improved at all, and they're still losing just as much money on every book they sell as they have in the past. In other words, they are the world's leaders in increasing the number of things they sell at a loss. Their "business plan" if you care to call it that, has always stated that as they grow, the volume and efficiency of their operation will result in shrinking losses, and eventually profit. The key was economy of scale. Well, they've grown a very good way. And continue to grow. And the margins aren't budging. That is not good news. Increasing the number of items you can sell at a loss is not a winning strategy. mg

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