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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: TheStockFairy who wrote (17023)	10/8/2001 12:03:00 PM
From: rgammon	Read Replies (1) \| Respond to of 18928

These are the arguments of the bearish for nearly every sector that is down in the dumps. While there may be some truth to these arguments, there is disagreement over the extent of these problems. Current pricing for many of these stocks appears to be pricing in bankruptcy liquidation in the immediate future. Anything less than that result in the next couple of quarters of earnings reports and the bears will have some short covering to do. Traffic growth is at the heart of Global Crossing's issues, is significant to very very important to a wide variety of other tele/datacom stocks. Granted, Global Crossing's stock price was pricing in nirvana in early 2000. Price then were peaking at just over $60. Today's trading, near $0.77, is getting Pice/Book down to about 3.0. We appear to be getting near a floor. For Bond investors, it is worth noting that Long Term Debt is only 28% of capital. If they can begin to eke out a profit sooner than expected, they'll have little problems meeting the bond interest payments and redemptions at maturity. The bonds that I was attempting to buy on Friday will NOT be purchased today, as the Bond Market is closed for Columbus Day. The CNNfn bond pricer was showing a tiny bit of price improvement for the GX bonds (about 1/16th), but my broker is showing prices unchanged. I suspect we are very near a near term bottom in the price of these bonds. As much as anything, I'll be buying these bonds in the hopes of a price gain over the next year or two. If the imminent bankruptcy filing remains over a year away as we progress thru time (i.e. the company finds additional financing and/or additional income that helps it preserve cash for ongoing opertations and the buildout of its network). For me, a doubling of the price while the payments continue is the best of all possible scenarios. This is not alot of money for me, so if the most negative result happens (2 bonds payments, then default, then bankruptcy, then the bond price drops below $1), I won't get upset, just a tiny bit disappointed. As AIMers, if we have any of these stocks in our portfolio, the buys we have made in the last 3-6 months will look EXTREMELY good if the bankruptcies do not occur. Robert