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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: LPS5 who wrote (13509)	8/12/2001 4:05:14 PM
From: Raymond Duray	Respond to of 18137

Hi LPS5, Nice post. I really liked this one. :) Your comment about caveat emptor is, of course, my standard of judgement about the markets. My comments to which you sometimes object are however directed toward the tendency of Wall Street professionals to use any and every means of seduction to part the patzer from his cash. Be it the incessant cheerleading by CNBC, Lou Rukeyser on PBS, or Lou Dobbs in the TV medium, or the endless touts from the likes of the Gilder Group, there's a plethora of ways that Wall Street can get it's message out to the masses without having to do all the heavy lifting in-house. So, again, we sort of agree, and sort of disagree. Of course, in a perfect world, the retail investor would have real information and place his bets based on reality. But that isn't the way the world works. Instead, we have a certain "crowd" controlling the media and using it to create a convenient and tradable truth. And the mushrooms are meant to be harvested. Re: Wall Street didn't "create" stock. Large firms, as they always have, acted as a conduit through which companies sold their stock. I won't be saying anything here that you don't already know, but for the sake of lurkers who may not be aware of the standards for IPOs, I'm going to include a bit of history. In the early 1980's, a relative of mine was the VP of a high tech company that wanted to go public. They eventually selected Shearson as their underwriter. Shearson, for its part, told the company that there were several milestones that had to be achieved before the company could issue stock. First, it had to be profitable for at least two quarters, then, it had to have at least $10MM in revenue per annum, at least 100 full time employees and prospects for steady and stable growth at a minimum. There were further stipulations about insider sales not to occur within 360 calendar days and other anti-dilutive provisions. That was, by all measures, a reasonable approach to qualifying a company for an IPO, IMO. Compare that with the nonsense that has gone on in the IPO market in the last 3 years. Basically, Wall Street firms have relaxed their standards to an extraordinary extent. Whereas in the early 1980's, there was at least some effort on the part of the underwriters to protect their clients, today, it would appear that fleecing the investing public is the main goal. I'm sure you'll disagree with this view, LPS5, but you'll not be able to dissuade me from the view that Wall Street is a lot more unethical, amoral and vulgar than it was 20 years ago. Caveat Emptor. Best, Ray