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

To: Bill Wexler who wrote (1127)	6/19/1998 11:38:00 AM
From: drsvelte	Respond to of 4634

ZMAX? Has this Y2K been looked at yeat? beartracker.com

To: Bill Wexler who wrote (1127)	6/22/1998 4:30:00 PM
From: Bill Wexler	Read Replies (1) \| Respond to of 4634

Avon (AVP) - a proud new addition to the DOOM INDEX (tm) I actually don't have many bad things to say about AVP in general - it's a decent long-term performer. However, the stock has seen a runup in the last few months which I don't believe is sustainable. Last quarter was mediocre - showing some revenue gain (mostly from overseas markets) and a net loss after charges (even after charges are backed out, profit growth was negative). My guess is that investors are getting a tad too excited about the potential of expanding markets in Asia, Europe and South America. I don't see how this justifies paying roughly 35x trailing earnings for this cosmetics manufacturer (management's most optimistic projections for profit growth are between 15 and 18%). IMO, the stock is now grossly overvalued. I am short at any price over 70 with a short to intermediate range target in the low 50's. Interesting side play - the Avon July 70 calls are currently bidding 7 3/8 and the 75 calls are bidding 3 5/8. Since we are heading into what will most likely be another uninspiring earnings release - I believe that both these calls will expire worthless.