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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: MileHigh who wrote (23393)	6/23/1999 9:17:00 AM
From: DownSouth	Respond to of 93625

MileHigh, it is a fickle market. But I don't trade. I just "adjust". I am in RMBS for the longterm, unless the fundamentals change. I did bale at about 85 on the way down this spring, but nibbled my way back in on the way up. I am enjoying UNPH, PMCS, CNXT tremendously, speaking of semi's.

To: MileHigh who wrote (23393)	6/23/1999 11:05:00 AM
From: GVTucker	Read Replies (6) \| Respond to of 93625

RE: Vinik and RMBS A little clarification of some misinformation. First, because Jeff Vinik is a money manager with a few billion in assets, he must report all of his long positions each quarter. The last filing, for the first quarter of 1999, listed no holdings in RMBS, meaning that he was either short RMBS or had no position in RMBS. In regards to how Vinik could run a stock, it could be by one of two methods, if Vinik's past record is used. The first, which Vinik employed often was via the 13D filing. Vinik is an outstanding trader, and can accumulate a lot of shares of a stock without much price impact. For those of you with little institutional experience, this is very difficult to do. Once Vinik got his stake above 5%, he would not only file a 13D, but also issue a press release, just to make sure that people didn't miss the 13D. Less experienced money managers (i.e. a lot of his old subordinates at Fidelity) aggressively bought the shares, driving the price up. They mistakenly thought that Vinik liked the stock a lot; actually, Vinik was the person selling the shares in this price move to his old cohorts at Fidelity. this worked well for Vinik for about 6 months, but eventually, the kids caught on, and Vinik ceased the practice. As far as the other method of running the stock, a short squeeze, many have stated that Vinik does this a lot. I am not one of those people. But if Vinik did squeeze the shorts, this is how he would do it. First, he'd buy a large block of stock, and make this stock available for lending. Then, after a lot of hedge funds borrow the stock and sell it short, Vinik turns around and calls back the stock. The funds look around the Street for a large block of RMBS to borrow, and find that the stock is very 'tight.' They have no choice but to buy back their shares, driving the price up. A little momentum is created, and others jump on the train for no other reason than to be part of the party. Vinik sells into this upward momentum. As I said before, I don't think Vinik does this, but many do. Reason why I believe scenario 1 happens (actually, why I know it happened) at Vinik Capital Management: In this case, the people who are getting screwed are primarily people at Vinik's old employer, Fidelity. This would be just fine with Jeff. IMO, Fidelity basically screwed Vinik when they fired him, and there is certainly no love lost between the parties. Reason why I believe scenario 2 does not happen (although I really have no idea) at Vinik Capital Management: In this case, the people that Vinik would be screwing would be other hedge funds similar to him. In this case, Vinik would be alienating a group that he could very well need in the future, if he needed to borrow a hard-to-borrow stock. In addition, although there are certainly people that think Vinik is scum, I am not one of those people. Ruthless, yes, but not scum. And IMO, this practice would cross the unwritten hedge fund rules of ethics.