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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: steve in socal who wrote (9669)	12/22/1999 2:51:00 PM
From: OldAIMGuy	Respond to of 18928

Hi Steve, A good friend in ChiTown who likes ST trading (even though I've been beating up on him to AIM for about a Decade) enjoyed the ride to about $28 then bailed. He owes me a couple of stiff drinks on New Years for the "tip." However, I rarely listen to myself.... I've heard it all before! So, no, I didn't buy any myself and have been kicking my own behind ever since. Actually INCX bought up a company in Atlanta that a friend, from nearly 30 years ago, owned. She called me back in November and said something like "Ever since these folks bought our company out for their stock, the price has been falling. I don't understand the stock market. Can you explain what's happening? Should we sell before it goes to Zero??? Here's what I replied: Here's what I've found: There's a bulletin board site with some decent information at Subject 19184 I've posted a couple of questions on the site just today and received some answers. INCX should close the next quarter with positive earnings, making the first 4 quarters of consecutive net profits in its short history. Revenues are growing rapidly - but I have not been able to determine if it's all from acquisition or partly internal growth. I'd like to see a balance there. The stock showed a volume spike two days ago which some who follow Technical Analysis might call a "Selling Climax" . Big volume with a drop in price followed on by a couple of days of low volume and gains. Spells "accumulation." There's been severe short selling on the stock in the last couple of months. Here's the data: Message 11786736 That's about all I've been able to learn this afternoon. All in all it looks like it's ready to start its recovery. In recent months, many of the specialized Software companies have had stock price problems. The perception (not accurate, in my opinion) is that Y2K concerns were going to hold up sales of date sensitive software until after the next Millennium ticks over. If that were to occur, it would mean that many software companies would have bad quarterly results in the 3rd and 4th quarter of '99. It also means that the first quarters of '00 should be boom times for the same companies. It's my opinion (and where I've been putting money in the last couple of months) that this is all over-blown. Once the dust settles, these companies should do well. I am assuming that InfoCure is suffering from "guilt by association." Another thing to remember is that stocks can be heavily "speculated" when not earning any money - look at the internet stocks. Once they actually start to earn money, like InfoCure, some investors do a Reality Check. In other words, how much time will it take for the company, at its current growth rate, to start to make the share price "reasonable" when compared to their industry? As long as there's nothing very measurable, speculation can run high. Once there's earnings, it is like tossing cold water on the speculators. This doesn't mean the end of the world, but can mean a consolidaiton in stock price that lasts for a while. It would appear that this is what's happened with INCX. I do like the average daily volume of about 500,000 shares. This is good for the shareholders and the speculators. Should the people that have sold INCX SHORT all have to cover their positions (buy shares in the open market to replace the ones they've "borrowed" to sell short) when the price starts to rise, we could see a quick squirt in the price/share. Hope this helps a bit. I appreciate the phone call as I like to learn about rapidly growing companies, especially when I have known people that are involved. Jabil Circuits is run by Tom Sansone from Hillsdale College. I have invested very happily in his company for a couple of years now. JBL is the ticker symbol on the NYSE. I only learned of it because of mutual friend Lew Everly mentioning it. Then, a few weeks later I saw Tom on CNBC's Squawk Box show. After studying the company, I decided to drop a few bucks on their ticker symbol. It's now a sizable commitment! Here's a web page you can use for the "book reviews" I discussed with you: execpc.com Two of the five books are actually Psychology books. Psychology has more to do with daily market activity than most investors realize. That's why I emphasize the topic at my web site. Here's the index page for my web site: execpc.com It has links to more detailed pages on the subject of investing and the method I use and teach as a risk management model. Risk and Reward are always linked. The concept is not hard to understand. It's when we replace the terms with Fear and Greed that the understanding seems to fade. It's still the same subject, but seems more "personal!" My own motto is "Buy from the Scared and Sell to the Greedy!" It's worked nearly flawlessly for 13 years! Not exactly "In Depth" research, but good enough to get a snapshot of the stock. I guess at this point we'd have to be thinking that it would be a good idea to start with a very FAT cash reserve if we're going to get started now. Best regards, Tom