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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (46490)	4/15/2000 1:32:00 PM
From: Jill	Read Replies (3) \| Respond to of 99985

FWIW...over on Voltaire's Porch, Voltaire (Tom) has gotten eight calls this morning alone from people who were called by their brokerages today, Saturday, with margin calls. I'm just not sure the margin-selling carnage is over. The 350 point drop on Friday may cause another wave. That's what worries me about early next week, and I don't see that institutions/houses will start buying until about Wednesday afternoon

To: American Spirit who wrote (46490)	4/15/2000 2:20:00 PM
From: jbe	Read Replies (2) \| Respond to of 99985

Some interesting facts about this last week's big losers, and a (gulp!) prediction. I have just finished running Telescan screens to find the biggest losers for a one-week period, a two-week period, and a six week period. The screens also provided information about p/e's, price/cashflow ratios, past and projected eps growth. etc. Interesting! Of the 100 companies who were the biggest losers of the past week, there was only one biotech, and not a single classic <dot.com>. (If you go back to the six-week period, you will find more pure internets & biotechs.) The overwhelming majority of the big losers were in the computer software/peripherals/components area. Many of them appear to be involved in supplying software, equipment, services, etc. for B2B commerce. The rest were all telecom equipment companies. What did they have in common? With the exception of ONE company (ISYS, which fell on downgrades of future growth expectations), they were ALL cashburners (either negative price/cashflow ratios or exceedingly high ones); they ALL had negative p.e.'s, or very high ones (over 100); most showed little, or negative, eps/cashflow/sales growth in the past year -- but at the same time, most had high projected 5-year-growth rates (based on what?). This same pattern is characteristic of the two-week losers and the six-week losers. It suggests that a machete-carrying crowd is moving from industry to industry, systematically slaughtering no-earnings, cash-burning high flyers (and taking down some innocent companies by accident). I predict that if this logic continues to prevail, the broadcasting industry and the rest of the telecom industry will be next on the list. (Not that they have not suffered so far: but they have not suffered enough.) I say that because when I ran some searches, several weeks ago, looking for no p/e cashburners, I turned up just as many companies in those areas as in those that have been hit the hardest. Look out below! jbe

To: American Spirit who wrote (46490)	4/15/2000 2:21:00 PM
From: Les H	Respond to of 99985

You're applying value in a relativist sense. Relative to where their P/E's were a month ago, or to the high flyers. IBM's still only 12-15% growth company. The rest of the valuation is in the name value only and liquidity.