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Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: bob glass who wrote (5451)	4/25/1998 9:03:00 PM
From: Jason Cogan	Respond to of 12468

Bob: Congratulations on a well-reasoned post. Since everybody's asking, I might as well address it. Why is everybody so cynical about my agenda? I have no position in Winstar. To be honest, I started out thinking that Winstar would be a good short. Now I still think it's a good short, although you've given me reasons to consider before shorting. That's what good investing is. Analyzing all sides of the situation, and figuring out if something is mispriced. However, I still think there are some very real risks in considering Winstar Communications as an investment. The fact that this thread can be thrown into such turmoil, by one person merely pointing out obvious questions, underscores the tenuous nature of investing in such a stock. If the company had real earnings, you could simply respond "look at the numbers." From what I've read and heard, people's rationalizations for owning this stock boil down to three things. 1. Management is so good they should be trusted based on their vision, regardless of their financial performance to date. 2. They will not run out of money, despite what the balance sheet is saying, because of reason #1. They will not dilute the stock, despite what the balance sheet is saying, because of reason #1. 3. The analaysts projections must be right, because God help us if they're wrong. And besides, why would Wall Street want us to buy something that has no value? It's not like they're getting an underwriting fee or anything? As for your insight regarding perception and stock prices, you are very correct. In the short term. As Ben Graham, tutor of Warren Buffet liked to say: "In the short run, stock prices are voting machines. In the long run, they are weighing machines, weighing the amount of a company's earnings." As always, with all investing, earnings are ultimately the name of the game. So I'm sorry if you find my questioning of negative earnings and analyst's projections as mundane. It seems to me these questions are as relevant as they ever were. Regards, Jason Cogan