Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : DIGL... Digital Lightwave.... Making Waves.... -- Ignore unavailable to you. Want to Upgrade?

To: Peter R Smith who wrote (353)	2/3/1998 9:42:00 AM
From: Mahesh	Read Replies (1) \| Respond to of 934

Peter, I do not believe in TA. I depend upon FA. That does not mean that I disagree with you that in one year the stock will provide positive returns. As I have said many times they do have a good product. The current drop was justified however as the sales and earnings are not to the levels what investors had believed. The next year potential is somewhat clouded by as to how material the various lawsuits will be.

To: Peter R Smith who wrote (353)	2/3/1998 11:42:00 AM
From: squirrel	Read Replies (1) \| Respond to of 934

You wrote: "Plot a big graph, about A1 size, put it on a wall and stand way back. This fall is an over reaction, classic TA will give good 1 year returns." I do not possess your ability to see into the future with such clarity, so I will refrain from making predictions as to Digital Lightwave's future. I will, however, render my interpretation of current circumstances and of the events leading up to the present. As they currently stand, our views do not coincide. I would not characterize Digital Lightwave's current pricing as the result of classic TA. Neither am I in possession of information that leads me to believe that current pricing is an "over reaction" inspired somehow by TA. For me, the central, most relevant issue is the element of trust. Digital Lightwave, by announcing the need to restate prior quarters revenues and earnings, has admitted to violating the explicit trust the market had bestowed upon them. It is one thing for the company to say that $6.8 million in orders did not come in as expected. Those of us who trade or invest in small start-ups know that we are on a rocky road that bounces around with quarterly fluctuation in earnings. It is an entirely different matter when the Management of a Company tells me that information they had provided me is not true, and then declares they are going to really tell me the truth now. Maybe I am not making my point clear here, but I do interpret this as an event driven blow-up. The event, in this case, is primarily the loss of trust that occurred with the announcement to materially restate revenue and earnings. Some investors, such as myself, are less inclined to buy back into this company in the absence of a very convincing explanation. Not everyone that invests uses TA. I would like to hear from some of you that really do use fundamental analysis in your decision making. When you evaluate a company, what weighting do you give to its Management. How likely are you to dismiss a restatement announcement like Digital Lightwave's as being immaterial and irrelevant to the competence or integrity of management? Peter, maybe the market is overreacting; but given the information currently available, you and I see things differently. Your comments could be understood to imply you have done due diligence in your own fundamental analysis, that you possess better information than the current market, and that the current market pricing has been unduly influenced by mindless TA. Is this what you are saying? If that is what you are saying, I agree that TA is in the mix, but I would suggest that you not be so quick to conclude that fundamental analysis is an insignificant factor to current pricing, and that you may benefit by soliciting the thoughts of others who have done fundamental analysis as well. For example - "What specific information do you have, Peter R. Smith, that you believe is so reliable and so positive, that it causes you to conclude that 'this fall is an over reaction'? " If you know something we don't, please share it with us." On the other hand, if you are declaring that your comments are really describing your own rudimentary TA, I don't know that I would be comfortable extrapolating per share pricing one year into the future using your methodology. I think there are some good technicians on this thread that are better qualified than I am to render an opinion on this rather novel pricing model. Would some of you care to comment? Maybe your comments merely reflect your hopes and desires. If that's the case, just be mindful that wishin' and hopin' is a poor substitute for real analysis - fundamental or technical. Peter, I hope you have a prosperous year.