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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Blue On Black who wrote (6270)	10/29/1997 4:39:00 PM
From: Roger A. Babb	Read Replies (4) \| Respond to of 9285

Lee, I don't think the Asian problems are over. It is also very uncertain which way our markets go from here. The rebound yesterday was extremely strong. But I had the impression today that the market was trying to go down and there was some sort of contrived floor holding it up. Did anyone else sense that or is it my imagination? If I am right, we can expect Asia to dive again tonight.

To: Blue On Black who wrote (6270)	10/29/1997 4:41:00 PM
From: taxikid	Respond to of 9285

lee stay away from short any adr that makes products there{the rim} and sells them here- especially thru their own networks,etc} CREAF is actually 30% stronger internally- because their dollars are american and their employess are singaporean- their cost of doing business- {eg-contracts w/asian suppliers are still the same except that they are buying with 30% more money thanks to the dollar being strong- if you feel the dollar is weakening then base a trade on that - i believe that creaf's earnings went from flat to positive surprise purely on the fact that they have such cash. increased margin makes a flat qtr look great every time

To: Blue On Black who wrote (6270)	10/29/1997 4:45:00 PM
From: Roger A. Babb	Respond to of 9285

Lee, as to your comment on thread "rules", the only rule that we enforce is "be nice, no vulgarity". And that doesn't mean that you can't disagree with someone, just do it nicely. The topic has been generalized to include anything related to investing plus general comradre and friendly support of each other in all our endeavors.

To: Blue On Black who wrote (6270)	10/29/1997 4:53:00 PM
From: John Nowicki	Read Replies (1) \| Respond to of 9285

Well, I got a Grad. Degree in International Affairs/Economics, but I'm not working in the field...so judge this accordingly. My analysis of the whole thing is that certain countries in the region (Thailand especially), are in a long term mess. Basically, if you need to go to the IMF for help, you are in for hard times. The govts. there have been buying the population's loyalty with lots of goods at uneconomic prices (i.e. way overvalued currency). This gave the speculators an easy run on their currencies, starting the whole bit we've seen. Japan and Korea are also in deep...way too much govt. intervention in the economy. Unfortunately for them, there are large constituencies who support these dumb economic policies, since they live on the rent taking. The HK run, on the other hand, was just stupid. HK is pretty solid, and is backed by China, which may have problems but is just too big to be a target. Bejing can't afford to see HK go down due to numerous negative ramification it would have in its economic and foreign policies. So, as far as whether to invest, short, etc... Long term, Asia will get its act together, and by mid way through next decade will be a major force. Short term (<1yr)industries in Thailand, Indonesia, etc...that are primarily import or domestically directed in output are dead. Export companies, however (any that send most of their output here), should see a major boom from increased exports (due to devaluation). Japan will stay about where it is. The economy need some stimulus to kick in, but if the govt. spends directly it will be cancelled by the fact it can't afford to. If they try avoiding long term reforms, and export their way out, we will get into a trade squable they will lose. Pretty much ditto for Korea, with the addition of the whole N. Korea problem...until that is fixed or stabilizes nothing much is going to happen there.

To: Blue On Black who wrote (6270)	10/29/1997 8:19:00 PM
From: hasbeen101	Read Replies (1) \| Respond to of 9285

Given the news on the 'Pacific Rim' - massive debt,over-capacity, monetary problems, general political uncertainies, and our investigations into campaign contributions from the region, it would seem that a massive short of companies from that area would be in order. Is there something else I should be considering? I would appreciate anyones thoughts on this. One point to consider is that different countries have very different economic pictures. Malaysia, Indonesia, and Thailand have experienced boom conditions for years, and the bubble has now burst since a lot of the money was going into unproductive projects. On the other hand, Japan has been in the deep freeze for about six years now. Perhaps Singapore and Taiwan are buys, since they are governed better than some of the others. The other relevant point is that many of these markets have dropped by 30% + in local currency, and 50% + in US currency. It's probably too late to start shorting them.

To: Blue On Black who wrote (6270)	10/30/1997 9:06:00 AM
From: John Dally	Read Replies (1) \| Respond to of 9285

Hi Lee, Another place to look are the US-based semiconductor equipment manufacturers. They're down a lot, however, the Far East represents on the order of 30-40% of their revenue. These customers are now broke! In macro economic terms, PC units sales were reported to be up 16% year over year, however, I would guess that average sales prices are down by more than that. So, total revenue for the industry, ie boxmakers, semi manufacturers, and semi equipment manufacturers is down year over year, yet valuations are still up an average of 100% from last summer's low. (Take a look at the SOX.) The entire sector is in big trouble. Under the following graph, you can click on "Stocks in Industry Group" to look for candidates: tscn.com Best regards, John.