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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: UNDERTAKER who wrote (207)	1/6/1998 1:35:00 AM
From: WBendus	Read Replies (3) \| Respond to of 18691

AOL Will Fall A couple of days ago I started the release of my reasons why AOL will fall dramatically during 1998. My first two points centered around tax related issues which would bring about additional selling in the early parts of January and the fact that there has been a lack of technical confirmation on the recent advance in price. I am proud to report that the technical divergences which I was speaking about a couple of days are still showing signs of divergence and, in my opinion, the technical picture still looks very weak on this stock. Tonights points will focus on the signs coming form the market and the hype diseminating from the company. When a company that is expected to report over $2 billion in annual revenes starts to announce that it is signing contracts for $5 million, this should come as a big warning sign. The contract announced on December 30th between AOL and Cybermeals marks as one of the prime examples of the type of hype which for a short time artifically susports a stock's price. This company is becoming infamous for distrubuting meaningless press releases whose only function are to hype the company and its stock. Consider these recent examples, none of which really offers any value to investors. Mon Jan 5 AOL Digital City Adds Salt Lake City and Phoenix to its Local Information and Entertainment Sites On America Online and the Web Wed Dec 31 AOL America Online Offers Post-Holiday Help for Computer Upgraders And New Owners Tue Dec 30 AOL America Online to offer takeout meal service Tue Dec 30 AOL America Online, cybermeals Announce New Commerce Partnership Wed Dec 24 AOL American General Ventures Inc. Provides Wal-Mart Online with Notebook Computers. Tue Dec 23 AOL 'Kids' from 1 to 92 Have Written to, and Heard Back from Santa through AOL -- Have you? Mon Dec 22 AOL America Online Reports Top Selling Gifts In Cyberspace Thu Dec 18 AOL Do You Consider Yourself A Last Minute Shopper? Nothing of value in any of these stories except for hype. Beyond all the hype that is surrounding this stock, you must also look to the market for confirmation of the stocks surge. If we are all to beleive that the internet is growing by leaps and bounds, then we should expect to see this belief reflected in other segments of the market. All of this additional demand on the infrastructure of ISP's would mean that there should increasing share prices, revenues and profits for the companies that supply ISPs with networking gear. Stocks such as COMS, CSCO, ASND and BAY should be climbing, and rather than hearing inventory buildup concerns from COMS, we should be hearing about how they can not keep up with the demand. I think that one of biggest concerns for AOL should be the fact that modems are sitting around in inventory at companies like COMS. This should be particularily alarming and it is a warning sign that the growth of telephone connections to the internet may be coming to a dramatic slowdown. Networking stocks and internet stocks should go hand-in-hand in terms of their performance. Wayde. PS. More reasons will follow over the coming days and the reasons will get stronger.