Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Mama Bear who wrote (2514)	9/9/1998 9:50:00 AM
From: Yamakita	Read Replies (1) \| Respond to of 4634

Did the fine folks of this board read the article in Newsweek on "Sherlocks of Finance," in which Adrian du Plessis is profiled. It is worth reading. This guy Schilit sounds like an unbelievably profitable source of shorts. His newsletter costs $10,000 per year though, ouch. However, if ten people ponied up a grand each, we could put each recommendation through a ten-person ringer, whittling his picks down the best two or three, and short the living bejesus out of them. We could name our little coterie, "Full of Schilit." "Howard Schilit hunts bigger prey than YBM, dissecting financial statements from blue-chip companies like United Health Care, 3M and Oxford Health Plans. Unlike du Plessis, he's not looking for outright fraud; rather, he identifies "early signs of operational deterioration," particularly by zeroing in on aggressive accounting moves that might camouflage a sagging business. Although Schilit, like du Plessis, doesn't buy or sell stocks based on his research, his efforts are explicitly designed to aid investors. His clientele of institutional investors -- a third of them short-sellers, who bet on stocks to fall -- pays more than $10,000 a year for Schilit's monthly newsletter on companies with questionable accounting. Showing up on that list usually foretells trouble: the average stock price of the companies Schilit highlighted in the last year is down 26 percent. "Howard identifies problems that conventional Wall Street analysts don't pick up on," says one hedge-fund manager. Although most companies quietly weather Schilit's criticism, a few emerge to become full-fledged scandals. "Sometimes when you see unusual accounting, that may be the tip of the ice-berg," he says."

To: Mama Bear who wrote (2514)	9/9/1998 2:29:00 PM
From: Cosmo Daisey	Read Replies (2) \| Respond to of 4634

Barb, Don't run for cover just yet. Supported by the Supreme Court's Dirks v. SEC decision, analysts such as the shorts have considerable latitude in disseminating less than positive, nonpublic information that they uncover, provided there is no violation of a fiduciary relationship between the source of the information and the subject company. This landmark decision is crucial to upholding the financial community's ability to look toward short sellers and other skeptical analysts of management's positive statements and forecasts. Coz