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

To: Carl H. Gotsch who wrote (7057)	11/15/1997 11:54:00 PM
From: Pancho Villa	Read Replies (1) \| Respond to of 9285

CG RE ORG would have to look at fundamentals. The stock split is just a paper transaction. If there are no fundamentals behind it the sotck shoud keep on falling as long as the stock dividend is of same king (same Company) shorts have nothing to worry about, except of course that the herd in the street rushes to buy because of the split. Academicians say this should not be the case. fundamentals dirve stock prices not paper transsactions such as stock dividends. However, some confusion arises because it is usually the high growth companies the ones that declare a stock split to get to a more accessible (i.e., popular sale price). All this BS being said, I never short a stock if a split is coming, even if it is a dog traders are not as smart as Professors Sharpe/fama believe. Pancho

To: Carl H. Gotsch who wrote (7057)	11/16/1997 12:23:00 AM
From: Roger A. Babb	Read Replies (2) \| Respond to of 9285

Carl, RE: ORG stock dividend. A stock dividend is just another way of doing a split, in this case a 5:4 split. There is really no reason that a split should cause the stock price to go up because your 5 shares will own the same percentage of the company as your 4 shares did before the split. But many investors are not smart enough to figure that out and will think the new lower price is a buying opportunity and drive it right back up to the old price. Thus it is usually unwise to short before a split, wait until it tops out after the split.