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Technology Stocks : Seagate Technology -- Ignore unavailable to you. Want to Upgrade?

To: Raptech who wrote (5772)	9/23/1998 5:03:00 PM
From: William Epstein	Read Replies (3) \| Respond to of 7841

Raptech; You ought to know by now that the price of a stock, at any given moment, has next to nothing with fundamentals. Examples; Netscape,Yahoo, DSC Communications (I made a lot of money on that one), etc.. I bought DSC at 5 and 7, waited 3 years, it went to 72, its book value was 7 1/2. It split and went up again. No earnings or underlying value could come close to justifying it. You still believe that fundamentals controls the price of a stock? Specialists control the price and you have seen several examples with the last few weeks. Seagate went to 56 at its peak and that couldn't be justified but it did. Then it dropped to 16 and couldn't be justified either. I know, I know. You will say the market does things to excess. However, Seagate has been dropping for a long time and any chart will show you it is a deliberate decline. Sure, the price should have dropped. Seagate lost money for about a year but 56 to 16? Did the corporation lose its value or its market share? Did its industry go out of business? Did it go broke? Did it dilute its stock during that period? No to all. It only becomes understandable when you look at who stands to benefit most and what the dynamics or their business are. The specialist will continue to take the price up until he accumulates enough shorts. Remember, the greater the spread between the top and the bottom the greater his profit. He doesn't care whether the stock is going up or down he wants the greatest spread he can get before he changes direction. You are still trying to reconcile the real world with the convoluted world of the NYSE. For the specialist that is the real world and he has his own agenda. Unless you see it through his eyes your blind. He takes advantage of people because they buy into myths like fundamentals, etc.. Yes, they are myths for him that serve his purposes. They give him the excuses to do what he would do, anyway. They camouflage his moves. If they don't reflect what's really going on, on the floor, they are myths. Yes, on a 12 year chart the stock my reflect its fundamentals and then maybe, not. Someone pointed out to me last night that Seagate is the same price as it was 10 years ago. Is the company the same company it was 10 years ago? Is its book value the same? I don't think so. Tell me at what point is the stock fairly valued. I will look at the 12 year chart and tell you when and for how long. I'll bet it wasn't for long. Once the stock is in the hands of the specialist it's just paper to play with. Think of it, paper for money. This morning, on CNBC they were talking about a company that had earned $250,000 on $15 million in sales but had a market cap of $500 million. Show me fundamentals that justify it? Ridiculous! There is a company of the NYSE called Bernard Chaus & Co., CHS. I knew Bernie when he went public in the middle eighties. His company was worth about $12 million, book but he got $300 million on the offering. He sold only 1/3 of the stock and he ran for the hills. People were buying the stock at 26 and he generously offered his employees stock options at 22. My wife was an employee and I wouldn't let her buy the stock. The stock was worth about 30 cents. About one year ago it was worth about 30 cents. They did a reverse split 5 for 1 and pumped it up to 5. Does that make sense? He's dead now but I still do business with the company. How many times and in how many ways do I have to make my point before anyone believes it? What standard of proof do I have to meet? If you want confirmed evidence, beyond reasonable doubt, you have to be an insider and then you already know the game. Can you offer any hypothesis and give me better proof or even do as well? I doubt it. With reference to my last post I said the stock might get as high as 70. I didn't say I was sure. I even said I use the chart to see if I can find long term angles of rise and fall. I am guessing at where the next peak will be but the chart doesn't give me a clue as to where earnings will be or should be. I used these charts to plot the course of DSC over a 7 year cycle. It took me a year of diligent work but it paid off. I am not in Seagate just to entertain myself. I participate in this bulletin board to entertain myself. PHOTOMAN/William Epstein