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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: Bosco who wrote (5206)	4/9/1998 8:50:00 PM
From: rupert1	Read Replies (2) \| Respond to of 6980

Bosco: Not sure how 30% drop requires 60% rise to break even unless you are talking about a realised loss. I feel sorry for any who have felt the need to sell for margin or any reason - I know how it feels. As for the activities of brokerage houses helping their clients, well if you can recognise the action you can profit from it too. If you are long then these market machinations need not disturb you. Not sure whether your reference to "hype" either way included me. I don't mind if it does because I know you are a gentle chap. BUT, I believe that my expectations for the stock is not hype. I was proposing a rise to $29 before earnings, then a move to the $31-33 range with an intraday spike to $35 at a time when most on the thread where resisting thought of a move to $29 before earnings. I think I can modestly claim to have been right. I also forecast that after earnings there would be a spiky progress to $34 and $37 and sometime in 4-6 months above $45. I thought it would be in the high $50's within 12-14 months. The warning caused me to cut back the short term forecast and slightly lengthen the time frame for the longer term forecasts. I thought a trading range of $26-29 was now more likely until after earnings. (Paul Fine predicted a trading range of $25.5-$28.5 with a dip before earnings). Well, we certainly recovered from $24, just before the warning, to $30 and hovered around $26-$29 before the "dip" to $23 today. It might be considered foolhardy in the light of all the pessimism to make predictions before learning of the earnings and assessing any modifications to BAY's own expectations. But so far, I have learned nothing to change my view, as amended after the warning. I expect that this stock will pass $45 in the original 4-6 month period I used before. I also think we will see a great deal of short-term volatility before a sustained upward movement in May or at a time when the prospects for the 4th quarter start becoming clearer. I know you have more modest expectations. But I have difficulty understanding how "longs" - i.e. those who intend to hold without trading, can justify holding BAY unless they expect it to reach those levels in that time-frame. I am not saying I will. I will certainly buy and sell. But the decision to buy back in after a successful sale is much easier if one's fundamental analysis suggests that the stock is, in any case, moving up to a predictable plateau within a rational time frame. This belief also helps sustain one when the stock drops precipitously for unforseeable reasons such as market moods, analyst downgrades or unexpected comapny or market news. I would not call any reasoned analysis "hype". But I do have difficulty with the genre of statements that when people buy or sell they or the "market" must know something. I also have difficulty with conspiratorial theories that if the price is going down then BAY is leaking information (although I know that leaking does exist in the market). I have difficulty with the kind of analysis that says because we have dropped 10% or 20% or 30% we will proceed to drop 50% more! This kind of analyis comes into play when one is frightened or otherwise emotional - I should know! In fact, the more we have dropped the more likely we are, statistically, to stop falling and go back up. I have sent out feelers to Cruiser; would love to hear what morale is like in BAY. Have a pleasant holiday. Victor