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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Bosco who wrote (5712)	8/20/1998 11:35:00 AM
From: Joseph G.	Respond to of 9980

Dear Bosco, the particular question I was responding to was if (and how) is it possible for a common stock to go all the way to zero, i.e., that even buying a stock 99% off its high is not always a conservative investment. Thus the example I gave was to illustrate that it is possible to have an operating or holding Co. which is basically worthless insofar as the current value of its common stock would be evaluated by a knowledgeable and rational investor. In no way was I attempting to imply that all stocks will go to zero within a year or two, even though "eventually" they will, as history and economic logic show. PS sitting in US it is, IMHO, nearly impossible to be able to dig dimonds out of the pile of manure of "special situations" -- again, not to imply that there are no dimonds out there.

To: Bosco who wrote (5712)	8/20/1998 12:14:00 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 9980

Bosco, you should know about stocks going to zero, CTYS (one of Sankar's favorites at the time) in their last 10q said flatly that stock holder get nadda. By the way, those preferred that did not hedge get nadda as well (some warrants on the future company). As for pegging, it is done to prevent speculation and drain on foreign reserves. Some countries have a "variable peg" (at some point Israel had a fixed peg of their shekel but each week they lowered it just a percent or two, gradual devaluation, of course you could buy or sell green back in the black market at appreciable premiums to the peg). The level at which a peg is determined historically, is whatever the prepeg (or usually a fat premium) conversion was. The problem with HK their currency was too weak when our dollar went to 80 yen/dollar (or chose the equivalent gold price then in effect if you are a "purist") and is now too strong when the dollar is "pegged" above 140 yen/dollar. They can repeg and then leave it for few years until they get absorbed completely in Red China's economy. And I agree with Paul that the next pegging will be down. Zeev