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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: Pallisard who wrote (11274)5/20/1999 5:16:00 PM
From: William Epstein  Read Replies (1) of 27311
 
Pallisard;

Thank you. I agree that the long/short game is too scary for most investors and should not be tried by any but the most experienced and well financed. I also agree the buying at a bottom and selling at or near the top and then waiting for the next bottom is probably the best strategy. It works as a compromise. There is a middle ground too and that is to sell the stock at the top and buy some puts at the same time. Less expensive if your wrong. These are just suggestions.

Reviewing the stock's performance during the last 3 weeks shorting at 8 1/2 and covering the next day at 6 1/2 would give a 23.5% profit. Accumulating at 6 1/2 and selling at 8 today would have yielded another 23%. 46.5% for 3 weeks work is not too shabby. If you can do it on average say, every 6 weeks the stock's pattern can be very profitable as it is. I think, that was the point I was trying to make. Despite its potential this company hasn't produced a profitable quarter in since its inception in 92. That is the character of the operation, so far. So, counting on profits, POs or potential profits at this point, seems to be pie in the sky. However, using the MMs' trading patterns, while risky seems more reasonable. (bird in the hand) They have to make a profit while they are waiting around like the rest of us. Otherwise, why bother to make a market for the stock? That gives me something to work with. The dynamics of their own business.
PHOTOMAN
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