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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Jefferson Prescott Dewhurst who wrote (28593)	2/21/1998 4:58:00 AM
From: Reginald Middleton	Respond to of 1572643

<Exactly. NSCP's share price was not based on any tangible hard assets but on a multiple of estimated future earnings and as such was a very high risk investment. As it turned out the earnings estimates never materialized and the stock price gravitated toward asset value which in the case of netscape is intellectual property and the value of such to a potential aquiring entity.> No Dewey! NSCP's inflated share price was the result of the noise created by traders taking advantage of innocent lambs who did not have the ability to value assets in the market. Those who do not possess the ability to value assets provide excess liquidity in the markets for those who do. This liquidty is gradually diminished as more knowledgeable players come onto the scene until an equilibrium is established. Read up on George Soros's Boom-Bust writings, the man is on point. NSCP was a perfect example. I must retirerate, you are assuming (dare I say fantasizing) that the market is truly efficient and exists in a perfect world. It does not. Hence the holes in concepts such as the random walk theory and truly efficient markets. <This is exactly what the happens every day as entities(individuals & institutions) purchase AMD's assets @$19/sh.> No Dewey, you are not purchasing the company's assets, you are purchasing a pieces of paper that represent 1/1,000,000,000th of AMD's assets. This significantly mitigates the risk of an unwise purchase. Buy the whole company at 19 dollars per share and add value to the ensuing entity and I will admit that I am wrong.