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Microcap & Penny Stocks : ALYA Cost cutting system via software as well as security -- Ignore unavailable to you. Want to Upgrade?

To: Essam Hamza who wrote (1232)	7/12/1998 4:04:00 PM
From: John S. Baker	Respond to of 2534

Well, I don't really want to get into a peeing contest with anyone ... least of all you ... but I think I should add a few comments -- in amplification of what you say and not in opposition. First of all, I am long on ALYA in spite of getting in at $1.30. My reason is fundamental, including all the items you cite. IMHO ALYA may be the next WNDR, a company which developed the pre-eminent, Windows-based software for controlling factory floors. The two companies have many similarities. Secondly, I neglected to put my standard disclaimer in my post(s) on Price to Volume. Mea culpa. Here 'tis: I use Technical Analysis to fine-tune buying and selling opportunities in my investments, but only after giving full consideration to fundamental analyses. TA does not drive markets if you plan to invest for more than a few days duration. No stock is going to go up (or down) solely because a technical indicator looks good (or bad). Rather, TA offers multiple ways of presenting and examining the constant battle between supply and demand. Sometimes, a TA presentation helps to remove the "noise" which is camouflaging useful information. And TA is useless for analyzing news-driven <often equates to "volatile"> investments because TA cannot predict the future, except to the extent that event is leaked before being actually released. Because of all these factors, TA generally is less effective in the analysis of thinly traded stocks. Thus a news-driven rise, as in: "I'm sure you wouldn't be surprised if the company comes out with a couple very significant news and the stock rises to $1.40 in two or three days...I know I wouldn't be surprised" has very little to do with using retrospective V-P charts to clear away the clutter and help us determine what price the preponderance of earlier buyers may have paid for their shares, and hence perhaps to divine whether they are pleased or displeased with their investment. Regarding insider buying, I take all these things with a grain of salt, too. For instance, I ignore insider selling because we have no idea why the insider chose to sell -- perhaps it was for the down payment on a new house or send a kid to college or to buy a new Mercedes or even to settle a divorce. On the other hand, there is only one reason someone buys a stock and that is because he wants to own it. I pay very little attention to reports that insiders have acquired stock by exercising options ... again because there are too many factors which can muddle the picture. I focus primarily on purchases made on the open market. In the case I cited, 'tis true that the stock has been in a downslide, but there have been multiple buys, and not on a regular schedule. That intrigued me, until I noticed (as I mentioned in the earlier message) that if one plots the price of the stock at the time the open market buys were made, it forms a very clear picture of just exactly what this insider consider to be undervalued. If the price goes below that point, he buys. If it goes above, he does not. I have developed a method of tracking insider open market buys which flashes an alert to me whenever a particular stock meets my screening criteria. I then follow up on that alert to see whether there is any fundamental reason to buy and then I use TA to time my buy. Truth be known, my system flashed an alert on ALYA about 6 or 8 weeks ago and it was on my screen when the recent runup began. (But I'm certainly not perfect. If I were, then why did I buy at $1.30 rather than at <$1???? I go into this detail only because I personally have have learned a great deal from learning how other investors handle their investment decisions and am happy to pass on what works for me. Happy Due Diligence. JSb.