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

To: Lazlo Pierce who wrote (4053)	3/4/1998 8:09:00 PM
From: Roger A. Babb	Read Replies (1) \| Respond to of 18691

Dave, the last time I shorted a stock on an earnings warning was ETEC and the darn thing closed up by the end of the day. This market is crazy, could happen with INTC and the "buy the dips" theory.

To: Lazlo Pierce who wrote (4053)	3/4/1998 8:10:00 PM
From: Ploni	Respond to of 18691

Someone on CNBC today was asked how he justified the S&P being priced higher than ever before. With a straight face, he answered that when the market has recovered from a recession in the past, the valuations were always very high, in anticipation of future earnings. I was thinking: (1) have we been in a recession lately? (2) he ignores the fact that no matter how high the market was valued in the past, it's valued even higher today. But this is the mentality we have to battle. People will be staying up all night to come up with a positive spin on INTC: It's a great company. Buy on the dips. They're getting into the networking business, instead of just selling chips they'll be selling entire cards and packages, etc., etc. I don't know where INTC will open. I'm just saying that Instinet always seems to overexaggerate the effect. Also, I've seen the futures lock limit down at 7:00 a.m., and by 9:30 the market opened flat. I agree with Bill Wexler that the market is insane, and wouldn't be surprised to see a "flight to quality" to companies that don't have any earnings at all. I don't want to see that, as I'm short those companies, but I wouldn't necessarily be surprised. Bill, I feel your pain. * * * Here's a post from AOL (again, I am overwhelmingly invested on the short side, and want the market to drop): Spring of '97. INTC rose from 69 to 85 in a month, in a raging bull market. Then it slipped for two days down to 81 7/8. They then warned going forward, at the same time that analysts downgraded. The fear that morning (May 30) was enormous. INTC traded on instinet at 68 1/2, before the bell. It then opened at 70 3/16 and closed at 75 3/4. The low of the day was 70. Over the next few months, it retested that low of 70, before eventually surging to 100. The days leading up to May 30 are strikingly similar to Feb '98. Let's see what happens tomorrow. I think instinet will produce the low print again. (all prices split adjusted)