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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Paul V. who wrote (48071)	6/18/2001 1:00:18 PM
From: Math Junkie	Respond to of 70976

Re: "Of the 437 companies that became one-digit wonders in 2000, only five have come back in 2001. That is only 1.1 percent." The causes are: "Many professional money managers, like those in charge of mutual fund portfolios, are barred by their firms' bylaws from buying stocks under $10..." The KEY issue here is whether it is a company for which you have good reason to expect business to improve when the economy improves. Look at what happened to LRCX. It dipped below 10 in 1998 and went up over 1500 per cent in the following two years. If the fundamentals are there and business comes back, the fact that a stock is below ten will be no barrier at all. In the case of Lam, I remember that when it was below 10, one of our posters was telling us that the brokerage where he used to work was selling their position. He was buying. Looks to me like these rules may work to create buying opportunities for those investors who are not subject to them and are able to separate the good businesses from the bad. (The following chart is split adjusted, so the pre-split price of 10 is plotted as 3 1/3.) bigcharts.com