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

To: Dan Ross who wrote (7602)	11/28/1997 12:26:00 PM
From: purecntry5	Respond to of 9285

My experience has been the same with AMZN. Especially when it runs up nice, getting short shares is like chasing the wind. By the time you can get your hands on some watch out cause thats when its ready to run up again. <g> FWIW I prognosticate the coming week to be down. Happy Holidays. Cowboy Brett

To: Dan Ross who wrote (7602)	11/28/1997 1:03:00 PM
From: vegetarian	Respond to of 9285

My experience with AMZN has been quite the opposite. I have bought books from them on 3 occasions and will buy them again. I recommended their site to a few of my friends who used it. Their site is well organized, service is fast and efficient. Their collections is excellent. Their prices are excellent their confirmation and tracking system is very nice, I think it is a very nicely run company. I agree that it is hard to browse books as one does in Barnes and Noble but that itself is inadequate reason for AMZN to be not making revenues in the future; their discounts of close to 30% are hard to beat. It is still possible for people to get the best of both world by browsing the books in a local store and ordering it online via AMZN or Barnes and Noble on line service, only takes a few days to get the books. Barnes and Boble shop prices are only 10% discounted whereas their on line prices (which are incidently competitive with AMZN) are 30% discounted and they will not try to match online prices because they can't. Obviously, somthing has to give in the long run with this model, and I think with publishing costs soaring the stores will be forced to reduce their inventory eventually. I think both online services are excellent though IMO AMZN is way overvalued at this point compared to its earnings even few years into the future. The following observation is in order: the analyst's estimates for AMZN are such that they will not make money for a while because they probably don't see this business picking up that fast whereas investors/speculators think otherwise and have great expectations and have bid up its price to ridiculous levels. Who will be right eventually is hard to say but the very high expectations from them to execute flawlessly every Q with no earnings for a while may end up killing what otherwise could be a great business opportunity and an efficient way to buy books. I guess Ben Graham would probably suggest that the company management should attempt to tone down ridiculous price levels at this time so that they wont run into future problems (in his "security analysis" he suggests that its management's job to make sure that the right expectations are made out of them, recently Ballard management did that when their stock ran up 20-25 points in 2 days or so); do we know if AMZN management has tried any watering down?

To: Dan Ross who wrote (7602)	11/28/1997 1:07:00 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 9285

Dan, RE: AMZN. Last time I checked the float was 3.0M shares and the short interest 1.987M shares! With this short interest to float ratio, it should be extremely difficult to find shares. An alternative (not as good as shorting) would be a synthetic short position: Write the July 50 Calls (ZQNGJ) Buy the July 50 Puts (ZQNSJ) I have done this before, when there are consistently no shares available, with excellent results <G>! The intrinsic risk is the same. A straight short is better since you receive the cash (I earn interest on the money) and there is no time limit. With a synthetic short, to minimize the time risk, you use the farthest out options available. Regards, Bill