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Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: David A. Stern who wrote (126)	2/24/1998 10:47:00 PM
From: Bill Wexler	Read Replies (2) \| Respond to of 4634

Hmmmm. Did I f#$& up on ATHM or what? ......DOH!!! I chose ATHM for its outrageous market cap and for the fact that the built-in expectations for growth are way overoptimistic considering the potential snags, money and time in building out infrastructure. The ATT rumor is just that...rumor, until proven otherwise. I was watching the stock for a while, and despite the big climbs and dives, it never really struck me as a "momentum stock". However; the trading volume in the last two sessions (naturally, starting right after I pick it to short) indicates that momentum gamblers are in this one full force and shorts are running for the hills. Momentumaniacs don't give a hoot about fundamentals, they only care about the story and hope that they're not the last sucker (like the guy who paid 71 a share for Yahoo or 80 for Netscape...of course if you enjoy paying a lot of money for "paradigm shifts" instead of earnings, then who am I to criticize?) I got nailed on Yahoo the exact same way. I shorted much too early. Fortunately, I was able to average up all the way to the top and even make money along the way by selling puts with hefty volatility premiums. I still believe that this company's intangible assets are wildly overinflated - perhaps by as much as a factor of 10. There is no doubt in my mind that the company is not worth $4.3 Billion, but if the momentum boys stay in this one, we may need a general market downdraft to break the stock...and it may not stay down for long. Long term, I still think 5 a share. I am going to continue averaging up on ATHM if it rises, and I will probably sell puts against any new short positions.