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Strategies & Market Trends : APMP (formerly APM) -- Ignore unavailable to you. Want to Upgrade?

To: tom pope who wrote (9399)	12/19/1997 2:28:00 PM
From: Jacky AY	Read Replies (1) \| Respond to of 13456

That's almost a sure 1pt to take. I am very glad that I picked that at the beginning of the week. *ONE STOCK ONE WEEK* I am going to short AOL next week at Monday open. Reason: The market is going nowhere in the foreseeable future. The high flying internet stocks are going to tank within weeks. AOL is very susceptible to bad news. And I believe the odd is against them now. As internet matures, the value of proprietary information system, which is the main and sole asset AOL has, will sink to almost nil. AOL has accumulated huge debt and low cash reserve. The book value of AOL is actually negative. One may argue that the huge customer base (~10mil) is going to attract advertisement fee (like recently from Barnes and Noble). But I believe the real ad fee will come to internet directly rather than going into something like AOL. The ad fee AOL received couldn't even pay for the interest incurred by the debt. So, why pick AOL to short this week? Because the TA turned negative! In fact, the pattern is very similar to last week's MSFT. Reached tremendous alltime high (a double top) and started falling. Everyone already see the results of MSFT. AOL shouldn't be too much different. The risk of shorting AOL is somewhat different than shorting MSFT. MSFT is a monopoly cash cow. The market always puts a high value on such companies. On the other hand, AOL has been a prime shorting candidate for the past year. But why AOL continue to climb in spite of that? The reason is that the amount of floating shares is lower than the short interest. There're almost short sequeezes everyday. The brokers and money managers are controlling the game. Individual short sellers are always in the disadvantageous position.