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

To: up3up4 who wrote (7887)	12/5/1997 8:58:00 PM
From: Dan Lisman	Read Replies (3) \| Respond to of 9285

Alex, Not counting commissions, Jan 50 puts have a premium of 9 1/8 based on current price of 56 1/4 and put ask price of 2 7/8 (on expiration day yhoo would have to sell at 47 1/8 just to break even) Jan 60 puts have a premium of 4 1/8 based on current price of 56 1/4 and put ask price of 7 7/8 (on expiration day yhoo would have to sell at 52 1/8 to break even), again not counting commissions. To carry this farther, lets say your choices were to buy either: 2 of the Jan 50 puts at 2 7/8 or 1 Jan 60 put at 7 7/8 If yhoo is selling at 45 on expiration day your 2 jan 50 contracts would be worth about $225 total profit. Or your 1 jan 60 contract would be worth about $700 profit. If yhoo is selling at 40 on expiration day your 2 jan 50 contracts would be worth about $1400 total profit Or your 1 jan 60 contract would be worth about $1200 total profit. Bottom line is that premiums on yhoo puts eat up too much potential profit in BOTH cases. Premiums are set by supply & demand and there is too much demand for these puts. If you really think YHOO is going to be $40 a share by the 3rd friday in January, go for it. Personally, I do not think it will fall that far, and will stay away from it. Dan

To: up3up4 who wrote (7887)	12/6/1997 12:09:00 PM
From: Craig Gordon	Respond to of 9285

I just can't understand YHOO, like hookers and helicopters it has NO MEANS OF VISIBLE SUPPORT. Is is still valued at 56 times its annual sales? Does it still have a PE of 1100? This company made a whopping nickel per share in the past 4 quarters. Even if that quadruples, which I doubt because of competition and costs, they will still be selling at over 250 times earnings. The difference IMHO AOL and YHOO is AOL is a company with sales - of about a billion per year. YHOO doesn't have the sales, and it won't. It will never, NEVER be able to make enough profit to justify its stock price without the sales. YHOO is nothing more than and internet company Oxford Health waiting to happen. One day we will all see flowing explanations of why YHOO tanked by the brokerage firms who are now touting the stock to their clients.