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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (29428)	6/29/1998 11:38:00 AM
From: Exacctnt	Respond to of 132070

Mike, Biotechs are seeing red again today. GENZL touched $5 and GZTC broke below $7. Are investors bailing because they are chasing momentum stocks? Do you think we are approaching bottoms here? Regards, Bob

To: Knighty Tin who wrote (29428)	6/30/1998 5:52:00 PM
From: Knighty Tin	Read Replies (5) \| Respond to of 132070

To All, When a quantitative maroon investment style goes bad and the co. tries to cover for their mistakes is illustrated perfectly by the release from the dim bulbs at Capstead Mortgage Corporation (CMO). Just click CMO on your quote box and then click on news. CMO gambled on a risky mortgage derivative called an IO, or interest only securities. As a result, stockholders equity in the co. has been reduced from $857 mil to $705 mil. That is 16.6% of equity disapeared because they don't know how to invest. Also, they lost that much money during a GREAT bond market. Heaven help them if they ever see a bear market. Insane that cos. this dumb ever come into existence or that shareholders would buy into them knowing that they are simply gambling, not investing. I laugh because folks from CMO once told me at a conference that my 90/10 technique was too risky for their portfolios. Just shows to go you, the more you know about quantitative risk "models," the less you really know about risk. I'll bet they wish they'd held T-Bills and bought puts on bonds instead of betting the ranch on IOs. Also, don't these guys read the newspaper? The same thing happened to Orange County a few years ago. I think it made the papers even in Dallas. <G> BTW, I do love the scam-talk, like "repositioning" instead of saying we're dumb and we're taking pennies on the dollar to get out of this mess. Good luck, MB