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Microcap & Penny Stocks : Rocky Mountain Int'l (OTC:RMIL former OTC:OVIS) -- Ignore unavailable to you. Want to Upgrade?

To: Pugs who wrote (32659)	1/3/1998 7:42:00 PM
From: TideGlider	Read Replies (1) \| Respond to of 55532

#4.. The Kid's Hot Stocks No question: Online buzz gives some stocks a quick boost. There's "a close correlation between Internet postings and changes in both trading volume and price," the NASD recently concluded after an informal survey. One online outlet that may give the stock it spotlights a lift is the Waaco Kid's Hot Stocks Forum. The Web site is open to all, but "close to 1,000" people pay $10 a month for e-mail messages that tout stocks, based on recommendations of other subscribers and tips from online newsletter writers who go by names like the Phantom. Subscribers get as many as a dozen messages a day from chief moderator Gayle Essary, 56, who favors "story stocks," which he describes as companies with "aggressive management that is very astute about disclosure." Essary has invested some of his own money in them in the past, but says he tells subscribers if he is passing along a pick on a stock that he owns. On its Web page the Waaco Kid recently claimed an extraordinary 97% average gain on the 53 stocks highlighted since May 1995. But that gain assumes you always timed things perfectly--buying the stock on the day it was mentioned and selling it at its subsequent peak (but the Kid doesn't tell you when to sell). Trouble is, many of the stocks get an initial boost from the online attention, then quickly plunge back to earth. If you'd adopted a buy-and-hold strategy with the Kid's picks, you'd have a 23.8% average gain from May 1995 to mid September. And if you eliminated one stock, which jumped more than 1,100%--from 25 cents to $3.19--the stocks barely budged, returning an average 1.6%. When the Waaco Kid spotlighted HealthTech International on March 18, the little health-club chain's stock jumped from just over $3 to $4 the next day--a 31% gain. But by April 10 it had fallen to $2.50--an 18% loss from the first day. A disgruntled investor asked, "What's going on? Every time supposed 'good news' comes out, the price drops. . . . Please tell me you know something that will at least get this stock up to $4 so I can get out." Essary replied that the dissenter had a poor attitude. "Presentation is everything," he wrote. "We have a means to make others see what we see. If we see frustration and impatience, and telegraph that to others, it's not going to have the desired effect." Online Ostriches Boosters of stocks on the Internet sometimes try to ignore bad news. When San Francisco money manager Dave Hammond, 42, posted negative notes about Iomega, a maker of computer storage devices, last year to America Online's Motley Fool bulletin board, he says, "I got some e-mail threats to my health and well-being." Iomega was an online darling. Its stock rose from $3 in October 1995 to $55 in May 1996 under glowing notices. Yet from a fundamental valuation standard, the price was totally irrational, Hammond says. He points out that at its peak, Iomega's market capitalization equaled that of Seagate Technology, a maker of disk drives with ten times Iomega's earnings. Online fans didn't want anyone to pour cold water on their dreams of wealth, but since its May peak, Iomega shares have fallen to $14. "In the long run, fundamental valuation wins out," says Hammond. "But in the short run, if enough players get involved in the stock, it becomes a little like musical chairs before the music stops." Meanwhile, in Florida, William DeMorrow is still enthusiastic about Urban Resource Technologies' prospects of turning garbage into riches for the company's investors. Last summer he even persuaded his stock club (another online venture) to buy 15,000 shares. But what about the balance sheets, which show a string of losses? "Don't read the numbers--they're terrible," he admits. "The financials really stink." Reporter: Marc L. Schulhof Related Story: Safe Surfing: Don't Trust, Verify