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

To: Dale Baker who wrote (10381)	6/21/1998 1:31:00 PM
From: Timoteo	Read Replies (2) \| Respond to of 18691

Dale Puts: FWIW I would go with AMZN. Disney is overvalued, but if a general market rally ensues between now and your expiration date, I would bet that Disney will go up regardless of numbers. Look at KO for example. By January, reality should set in for AMZN. I bought October puts but if the frenzy lasts into July, I'll roll them into Jan's just to be sure. As Tom Hua and JTC have pointed out with the Barron's article, overall book sales are flat. I don't see AMZN creating a new market, and competition may destroy any profitability, even by Y2K. Best, Timoteo

To: Dale Baker who wrote (10381)	6/22/1998 1:16:00 PM
From: Peter V	Respond to of 18691

Dale - You are brave to buy the Jan 50s on AMZN. This thing scares me to death, which is why I bought the much pricier Jan 80s (but wish I had waited till today, they are about $2 cheaper).

To: Dale Baker who wrote (10381)	6/23/1998 10:17:00 AM
From: Marconi	Respond to of 18691

Hello Mr. Barker: For the AMZN, DIS, JPM options consider this: look at what happens this week in the in-filling of positions in the new options trading this week. This will give a current sense of immediate sentiment. When I buy options I look for a likelihood of being in the money as well as nearness to an inflection sweet spot. In other words, options that are out of favor. With ZITL, that was the 5's when they had not traded below 6 for more than a year, but with looming bankruptcy were likely to do so. I looked quickly at the charts for JPM and DIS, and have been following AMZN. I think you would have to be calling a market turning point within a 6 month window to rely on the DIS and JPM, unless there are other over-riding factors. If you can call the turning point reliably (or an over-riding factor) then these positions should benefit favorably. This is a cursory view, and my inclination would be to avoid relying on calling a market turning point. Clearly they are overvalued--but I could not reliably predict a next natural overvaluation limit for DIS or JPM without looking for such factors. If you think a move out of range is likely, consider holding the puts and the calls. I don't know about DIS and JPM for that. For AMZN, I plan to add periodically to generating a synthetic short at 70+ with Jan '99 options, or later (I'm disappointed there are no new 9 month options this week). AMZN strikes me as having potential to come to reality--it is one of the purest strangely-priced stocks I'm aware of at this time--and when the strangeness leaves, accelerated downward moves should occur--I expect some in the spectacular dimension. Another side rule for options on AMZN down-side -- be prepared to lose it all twice before the third position takes hold. IF you are positioned that way for a net gain, your likelihoods are decent that you will survive the position favorably. I hope this is helpful to you. As for ZONA--I think I will look into following your lead--except I may need to scrutinize the situation for several days before taking a downside position. I believe Mr. Babb's short listing may be timely... I plan to short ZONA, but maybe options should be used instead. With the data published recent--effect approximating placebo--I would think an NDA would fail with the FDA. The FDA has a cadre of scientists, and the US FDA standards demand demonstrated performance in nearly every case (in Japan-no harm, and Europe is intermediate between USA and Japan), so there are slim odds that they will have such data, and if it does come about, I am quite sure it would have to be repeated in a second double-blind study and on a larger scale; which is very likely to fail. Sometimes companies show promise of making it on limited data, but the full statistical round of data-gathering wipes out the significance of the effect. And any evidence of efficacy based on retrospective study is without merit--usually a sign of desperation and a sign to short--but later, and at a more appropriate time. Retrospectives for efficacy is a clear sign to put that firm on your short potential short list. Best regards, m