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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: Rainy_Day_Woman who wrote (5296)	8/17/2002 11:56:48 AM
From: ahhaha	Read Replies (3) \| Respond to of 24758

Let's apply your criteria to BBY. I think it means buying a stock that is out of favor, not smashed BBY has dropped from 50 to 30 during the last several month's sell-off. It then dropped to 20 due to a warning of earnings shortfall of almost 50%. What is concerning is that that 10 point drop was a gap. That's a serious break and may be masking what may be hidden in the down side that exceeds what can be explained by market correlation. I'd consider this stock to be smashed and still reeling. - a stock showing signs of recovering, I only see a short covering bounce with little investment grade buying or bottom fishing. with good fundamentals, The company has put a doubt on its fundamentals. With a large company with thin margins, no propriety in product, failing the acid test which is applicable here, with exceedingly strong competition, with business structure that makes cutting costs extremely difficult(how do you cut costs?), and thereby declining forward earnings visibility, this hardly qualifies as having "good fundamentals". buying it as it begins to turn the corner BBY won't be "turning the corner" for at least 3 quarters as it has to adjust to realities of a declining wealth effect and consumer saturation. The yield per store square foot is low. BBY may have significant problem with debt service when they find that cutting costs cuts revenues. How do you down size one of their stores? How do you change the product mix to higher margin items? How do you get rid of personnel? Can the 4.7% operating margins hold up? I used to go to BBY several years ago, but I never bought anything there. I found myself walking out dissatisfied for some undefinable reason. Not that I went to Good Guys or Circuit City instead. I found myself buying at Sears! Now I buy from Good Guys over the net with their tax free, delivery free, set-up. How is BBY competing with this? What is their strategy? How do they get rid of all that low yield store space? and begins to gain price [note if you can, turns the corner] Forget about the stock price. You have to approach this as though you were the CEO. You have to solve BBY's problems and then if management doesn't do what you would do, you don't get involved. I assure you that BBY management won't take the necessary actions. They'll wait, hoping the macro environment will bail them out, because they believe that it was the macro environment that caused the earnings shortfall. They're fooling themselves. you can protect your risk, This is nonsense. How does one protect one's risk? What does that mean? investors try to protect their risk/exposure - This addendum doesn't clarify anything. your approach doesn't You have no idea what my approach is, and you have no idea why I mentioned JDSU. "Au contraire", "Confidence game", catchy words with little meaning here If you're buying into BBY, you're playing the Wall Street confidence game. It's a shell game because the stock will rise with the market for a while and then it will get hit reflecting the inescapable reality of its fundamentals. You're looking at a $10 stock that once it gets down there will randomly walk in a base for a long time until the company reincarnates itself, that is, if possible. You have a potential bust here unless the company changes radically. You are on the clueless page because you've demonstrated a complete inability to understand fundamental investing - not because your opinion differs, a subtle point, which I suspect may elude your comprehension. I can't comprehend this sentence, no matter how I twist it. It does show that you are a hypocrite. That means you do what you say is wrong for others to do.