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Strategies & Market Trends : NEW Market Gems - Swing and Day Trades -- Ignore unavailable to you. Want to Upgrade?

To: Internet Jones who wrote (1218)	6/25/2001 3:22:32 AM
From: lee kramer	Read Replies (1) \| Respond to of 1227

I'm often befuddled as to why stocks sometimes sell at the prices they do. I'll come across a company that pays a dividend yielding 5%; earnings that grow at say 8% consistently year after year; a stock price that moves up slowly, splits, moves up and splits again and again. And the company is ignored and sells at a ridiculously low p/e. That's just how it is sometimes. Other companies catch the fancy of the gunsliging hedge-funds (and others) has a sexy concept that's "gonna payoff BIG" sometime down the road. The company is losing money hand over fist but the owners of the stock simply refuse to sell and the stock hangs up there. VIGN, according to Qcharts whose numbers are often late and suspect, has an ROE of -43/share...but has a book value of 7.31/share. RATL has a 75 p/e and I wouldn't attempt to explain why. That's why I'm a technician, why I look at the chart, not the company...for it's the stock we trade, not the company. RATL, like so many others, put in a bottom, perhaps final, perhaps temporary, in early April. After it ran up to 28 or so the stock has been in a clearly defined trading range between 22 1/2 and 27 1/2. There are only two reasons to buy a stock; (1) for the dividend yield...and of course this is not applicable for 99% of all stocks. The second reason to buy a stock is notion that you can (eventually) sell it to someone for more than you paid for it. This is often a difficult and dubious endeavor. If I had an interest in RATL I'd wait to see how the consolidation that it's been in is finally resolved. Your note about INKT reflects much of what is happening in the economy these days. It's gonna take time for it to run it's course. If the Fed drops rates again this week it might cause the market to pop, but it sure won't solve INKT's problem. It will (lower interest rates) help companies who have a lot of debt on their books to refinance that debt at more favorable terms.