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To: SecularBull who wrote (50048)	7/7/1998 8:03:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Yes, of course it is important to let newcomers know the kind of nonsensical thinking (or lack thereof) that permeates certain investment ideas! ASP is one of the silliest. What really counts is the bottom line, and the crux of the ASP argument is the implicit statement "Things could have been better if ASPs were higher". The problem is that this statement totally neglects elasticity. To illuminate, suppose you owned an oasis on a well travelled desert road. What would you charge for water? The answer, of course, depends on the demand for water. Set your price too high and lots of people will bring their own on extra camels. Set it too low and you will have foregone profits. So, the ASP argument neglects the elasticity of demand and its impact on profit maximization. Geoff Nunn and I had several discussions on this issue, and Geoff's excellent comments should be read and memorized by anyone who is economically challenged (are you listening Stock Bull and Jim Peterson?). TTFN, CTC