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

To: Mama Bear who wrote (8876)	12/25/1997 3:21:00 PM
From: Pancho Villa	Read Replies (1) \| Respond to of 9285

Barbara RE BFIT Wpost mention: >>...A good example is Bally Total Fitness Holding Corp., a chain of 300 health clubs, which was spun off from Bally Entertainment Corp., the casino operator, two years ago. Most analysts saw this as a simple story: fast-growing gambling company drops sluggish fitness chain. It's a tale that most investors could understand, so, naturally, they bought the casino stock and shunned the fitness stock, which started trading at $7 a share and soon fell to $4, where it languished for nearly nine months (longer than usual for a spinoff). Then, in a familiar pattern, it began to soar. It closed at $19.31 1/4 Friday. Bally also provides an example where both the parent and the spinoff did well. Bally Entertainment was bought out by Hilton Hotels Corp. six months after the spinoff at a big profit -- though nowhere near as big as the gain in the fitness stock. In most cases, it's the spun-off company that gets bought up in a merger. In fact, such companies are four to five times more likely than the average firm to be acquired.<< IMO just more evidence the stock has gone up on hype and manipulation. Of course if you bought at 4 and knew it was gonna be pumpped up to 20, and then dumped last week you would have made 16 bucks! 400% return! [We could all be millinares after the fact] Shorting now [remember I started shorting at 17+] only gives you a potential profit of the same amunt when this puppy drops back to where it belongs. The reason why BFIT was spun off is because the business sucks. Then some good PR and the crazyness of this market did the rest. Pancho PS: I am not trying to convince anyone to short BFIT. IMO it is a hell of a good short and I feel I could help my friends at SI to make a buck but there is a non-zero probability that I may be wrong. I hope everyone is doing her/his own homework Pancho