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Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: Bernard Levy who wrote (8070)	9/1/1998 7:37:00 PM
From: silicon warrior	Read Replies (4) \| Respond to of 12468

In the FWIW category, I today wrote to Mr. Hirsch, CEO of Artt, informing him that his refusal to speak to Wcii representatives was a breach of his fiduciary duty and he may be sued for it. I suggested that he listen to wciib proposals and seriously consider them. In short, he is at risk.

To: Bernard Levy who wrote (8070)	9/2/1998 2:14:00 AM
From: SteveG	Respond to of 12468

Hi Bernard- For time, I'll have to truncate a lot of potential response commentary <..stocks do not trade at the mean estimate of their future earnings, which would be risk-neutral....> Which estimate? See my point? Academic market theory looks reasonable, but who invests on market theory, and who would even know how to accurately apply it? IMO, (almost) no one. <..Investors also throw in a risk aversion factor, typically measured by the standard deviation of fluctuations around the mean, to gain a margin of safety...> Who does this? How many investors even know what beta is, let alone how to find it? And if you are talking money managers, who makes investment decisions based on a comapny's beta? Anyway, as we move into a more volatile market (and remember - "cui bono?"), betas go DOWN. <..In other words, a stock which operates in a very predictable environment will trade higher than one which operates in a highly changing market, even if both of them have the same value for their future discounted earnings...> This is academic market theory, and again, may look reasonable on paper, but is not applied academically in the markets. There are different fund and individual investor philosophies or charters. I know of none who currently follow a purely academic approach (though UCI prof and author Bob Hagen started one awhile back. No market experience and lost his investor's shirts as I understand). But as I said, there are those funds who just don't buy what they consider high risk. Talking with one guy about WCII awhile back, he said "we don't do cashflow stories". I laughed and said "don't worry, WCII won't be a cashflow story for awhile". Bottom line is that ignorance is the biggest risk, and there is a lot of ignorance about technology in general and WCII in specific. Growth companies almost always have this "uncertainty". About risk in WCII vs toothpaste, I disagree. Certainly easier to UNDERSTAND the products/services in selling toothpaste, but a company's specific product, business plan and management play a bigger role in determining uncertainty (and concommitant volatility) than necessarily the product/service sector. So buy CL, but be careful with Bernie and Steve's Toothdrops Company. Financing - junk is getting killed now. This current illiquidity of junk may haunt the markets for a good while yet. Without doubt, companies depending on junk financing will find it a very hard sell for the near term. Who knows what 2000 will bring? By then, we have cashflows! And the likelihood of vendor financing as well. l8r (hard to truncate) Steve