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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: HeyRainier who wrote (125)	12/30/1997 9:45:00 AM
From: Scott H. Davis	Respond to of 1720

[Response to disk drive sector analysis & comment on January gems] I second the motion in terms of the short term risk for disk drive sector, perhaps the greatest risk is opportunity costs with better segments short term. When I place disk drive sector investor setiment and potential January effect on a mental balance scale, it's hard to be bullish. The same may be true for biotechs. Once symptom of the "Asian Flu" is that the overall risk tollerance in the market has dropped. So where does this lead? Dave's post reply about the potential short term benefit from playing the "heard mindset", with a keen eye out for technical deterioration/psychology shift is worth further consideration. Couple additional notes on companies I mentioned may be potential "January gems". AXE shows a negative return on equity because it has positive earnings but negative sharebolder equity due to a major contingent liability. It sold off portions of it's business in order to focus on key long term initiatives, and while primary liability for the pensions of former employees lies with the buying company, AXC retains a contingent liability. Also the CEO just purchased a lot of shares, but unfortunately for the market, did it thru the company in such as way that it does not get reflected as an insider purchase as far as what is reported. Since he sold this summer when AXC was around 7, his transactions (also previous buying when low back in 95) have been a good indicator. TRIBY goes positive for the year when they release 4qtr earnings in Jan. Expected to be .07 for the year (.01 .01 .02 .03), with DLJ estimating .15 for next year. not too bad for an issue on sale for $1.75. So on the positive sive, improving fundimentals, potentially big pop from FDA approval for their one step, rapid HIV test, 114% projected EPS growth rate next year. Down side is going against market setiment - micro cap biotech are no bueno right now. FYI, Scott