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Strategies & Market Trends : Range Bound & Undervalued Quality Stocks -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (827)	2/1/2000 10:00:00 AM
From: Esway	Read Replies (1) \| Respond to of 5499

At the rate these companies are adding accounts, they should see the bottom line back in the black by the end of the year. Not to mention Consolidation could start to hit this sector at anytime now IMHO. We shall see.... time tells all.

To: JakeStraw who wrote (827)	2/1/2000 10:16:00 AM
From: BWAC	Read Replies (2) \| Respond to of 5499

<I think it's 'cause the trading volume growth, customer acquisition, etc. is not having a major positive impact on the bottom line...> The hell its not. Take AMTD for example. Management has made a concious DECISION to try and grow the company quickly mainly through use of an very large advertising budget. They are paying for this massive advertising with minimal losses. The impact must be getting somewhere near the bottom line? 1.) Cut the ads expense to a normal level would put them on pace to earn $1 per share this year. But they invested in their infrastructure last year and they want/need/can handle an increased load of customers. They feel its time to go get them. Ads were a decision, they are not a fixed or required cost. 2.) The ad budget is at its top right now. they plan to spend the same amount (200 Million) in 2001 also. But that will be with at least twice the number of customers they have now and very possibly twice the number of daily trades. Their will be a certain number of customers/trades at which critical mass will be achieved in relation to the ad budget. Its at this point that the decisions will start to flow through to the bottom line. 3.) Its kinda hard to calculate the necessary number of customers due to many assumptions available. 4.) But average trades per day of 120,000 will do the trick. They were 86,000 per day last quarter up from 50,000 in last January quarter. (Note: On the conference call, AMTD ceo stated that in one day they had done 155,000 trades.) That was sometime between Jan 1 and 19th.