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

To: Bill Wexler who wrote (2784)	2/11/1998 9:58:00 PM
From: Roger A. Babb	Read Replies (1) \| Respond to of 18691

Bill, I agree that AOL is likely to remain strong until the market cracks. But instead of protecting my position with puts, I diversify my risks by shorting several stocks. I do have a few large short positions (ALTIF, PNDA, IFSC) but the AOL position is not large and I will accept the risk.

To: Bill Wexler who wrote (2784)	2/11/1998 10:01:00 PM
From: Mike McFarland	Respond to of 18691

Is there anything that AOL does better than the many other ISP's out there? The first ISP to give widespread service over cable may have a good monopoly for awhile tho. Unless AOL has some deal coming up with Viacom or other cable providers, it is waaaaaaaaaaaaaaaay overpriced.

To: Bill Wexler who wrote (2784)	2/13/1998 7:51:00 AM
From: Pancho Villa	Read Replies (2) \| Respond to of 18691

>>I think AOL should no longer be shorted. << (sorry about all the typos no time to spell check) You may be right. but IMO more for reasons that have to do with momentum/crowd investors. AOL is now [at least until yesterday!] a hot stock. >>. I really believe that there is a fundamental shift occurring....and AOL - in its own way - is developing a monopoly.<< Growth potetial in this unnatractive business [form the point of view of margins] is huge and they are the market leaders. A couple of observations on them becoming a monopoly though: 1. They are not the low cost provider. 2. The do have some competitive advantage in content [for some computer illiterate people - most people out there?], however this gets offset by their extremelly poor service and the fact that people are getting very annoied by the pop up adds [I have not seen them myself]. 3. Barriers to entry are low. The number of competitors is significant. MSTF may wake up and start pushing behind MSN. The long distance carriers may use Internet Service as a hook for long distance customers. Regards, Pancho In addition to high potential, new markets are ussually characterized by high margins, few competitors, and frequently barriers to entry such as capital and/or technology. IMO this is not the case here.