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

To: Roger A. Babb who wrote (4256)	3/6/1998 12:13:00 PM
From: craig crawford	Respond to of 18691

<< New paradigm: lower earnings today means higher growth rate and thus higher price. My experience with ETEC a few weeks back will now be repeated with many companies: miss earnings and price goes up. >> Your right. A total tulip market. But one stock that missed earnings is down today. Was down over 20%, now down 16%. FIBR

To: Roger A. Babb who wrote (4256)	3/6/1998 12:17:00 PM
From: Pancho Villa	Respond to of 18691

>>We have now entered the "tulip phase" of the market. Earnings don't matter. It is simply an auction market and any stock is worth what someone is willing to pay for it. This phase will end with a big and sudden crash. It could be Monday, but it also could be next year at 15,000 on the Dow. Not rational. Not predictable.<< I agree. I will hold down for another 10% decline in my portfolio value* or a significant correction before I make any changes whichever comes first. Hopefully the later. If you are well capitalized develop a strategy and stick to it. I refuse to buy high unless I reach the point in which I start to feel the pressure against my utility profile (curve). Pancho *a 10% decline, would require appreciation of roughly 15% on my net short exposure of 70%. This would seem not very likely given the current run but I have been calling right every crazy scenario I care to propose as a joke!

To: Roger A. Babb who wrote (4256)	3/6/1998 12:20:00 PM
From: Hank	Read Replies (2) \| Respond to of 18691

Roger, I've noticed that the reverse is true for many companies too lately. In other words, if you meet or beat estimates, the stock goes down. I think we may have inadvertantly been transported to a parrallel universe where the laws of physics and economics have been reversed! Remember- from now on, if we say we're short, it means we're long. If say we're long, it means we're short! Hank

To: Roger A. Babb who wrote (4256)	3/6/1998 12:28:00 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 18691

Roger, last year someone posted an excellent true story (on the '97 thread) about a short seller and the '29 crash. The investor shorted the market run up for a couple of years ... and ran out of capital just before the crash! If the poster could provide a link ... IMO, now is a good time to reread this cautionary story. Regards, Bill

To: Roger A. Babb who wrote (4256)	3/6/1998 3:33:00 PM
From: Ashikin Wan-Noor	Read Replies (1) \| Respond to of 18691

Roger, One thing seems predictable... the lower NASDAQ tanks, the more AOL, YHOO, AMZN go up as the du jour safe haven. Well, at least that's my take. RE: ZITL...I got back in at 13+, what's the story behind the pop today? Also covered CTXS and re-entered at 39 1/2.

To: Roger A. Babb who wrote (4256)	3/6/1998 10:21:00 PM
From: David Smith	Read Replies (5) \| Respond to of 18691

Roger: I agree with your assessment of the current market psychology; as a result, while this thread always makes for interesting reading--and, in rational times, would also make for PROFITABLE reading--it's obvious we're not living in a rational market. We've entered an age in which the following is commonplace: people are taking days off from real jobs to daytrade penny stocks (I've seen postings from these people on several threads); SOES shops charging $5000 for an introductory class are packed with eager new students even though SOES will not exist a year from now; New York taxi drivers are asking their passengers about how to get Instinet (true...happened to me today); and people are fantasizing about moving from the cities to the Rocky Mountains to become full-time daytraders, spurred on by the likes of late-night infomercials from Jake Bernstein. We've entered an age in which Maria Bartiromo's ratings are higher than Dan Rather's, and people don't care whether their President is lying or telling the truth--as long as the NAV statistic keeps increasing for their mutual funds every time they check (which for many people is once an hour from their real job). Ultimately, this too shall pass; the current baby-boomer generation has always had obsessions, from The Beatles to Betamaxes, that fall by the wayside. The only uncertain element is timing...but I hope it happens before we become a nation of loners, whose only satisfaction in life is sitting in the dark watching CNBC, checking our portfolios, and counting our money. As a result, until we see some kind of major market break, I think it's unwise to hold anything more than token short positions--especially in companies like AMZN and YHOO, which are the poster boys for the current mania. When the wave finally crests, there will be plenty of time to make money on the downside.