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Microcap & Penny Stocks : Rentech(RTK) - gas-to-liquids and cleaner fuel -- Ignore unavailable to you. Want to Upgrade?

To: Coral Lady who wrote (11006)	10/18/1998 11:16:00 AM
From: Bradpalm1	Respond to of 14347

<<How do you know that 7/8 bid was not put by a real seller instead of MM ?>> I don't know for sure. Perhaps someone with better knowledge of the ways of MMs could speak to this. Once again, the ongoing dialog on Raging Bull continues to be excellent. Here's some recent very insightful posts: By: BrianB_Aust Reply To #1008 by Mission_Control Saturday, 17 Oct 1998, 8:21 PM EDT Post # of 1026 Mission Control It is quite reasonable for you to draw the conclusion that there may be some arrogance in my approach. I can assure you I don't regard myself as cleverer than the market. What is driving me is pure logic. 1. Dow Theory - tested over 80 years - and recently evaluated by a bunch of professor academics as one of the most reliable technical indicators, is saying we are in a bear market. 2. The fact is that there was a net outflow of funds from Mutual Funds in August, the most recent statistics. 3. Page 1 of investor theory tells you that risk and reward are inextricably linked 4. It is a fact that an increasing proportion of companies are reporting declining earnings, and it follows that the risks of being fully invested in the market are rising 5. Against this background, the Fed cuts interest rates twice in two weeks, and despite this, although the Dow Jones rises to an apparent level which can reverse the bear trend, the Dow Transports do not confirm (classic bull trap) Conclusion based on pure logic: The sharp rise of the Dow last week was a reaction within a Primary Bear market. Regarding Rentech: By my calculations, at least 7 million shares were dumped onto the market in the past few weeks - against a background of a Dow entering a Primary Bear Trend, and an absence of Institutional interest in Rentech flowing from the fcat that the Road Show has not yet taken place and until it does Institutions will not have sufficient information to make investment decisions. The 7 million (or 20% of the entire isued capital of Rentech) comes from: 1. 3 million new shares issued by the company to raise cash to make cash flow positive acquisitions 2. Preference Share conversions 3. A block of around 2.5 million shares bought by a consortium at 25 cents some time ago, which consortium had a stated policy of exiting when the Tx deal was announced. (Even at 75 cents, this represents a 200% profit) Conclusion based on pure logic: The overhang of stock has been too great for the market to absorb in the short term, despite Rentech's excellent fundamentals. Overall Conclusions based on pure logic: Those who argue that the market as a whole may be re-entering a bull phase are wrong Those who are arguing that the market is overvaluing Rentech are wrong. With all the above out on the table, the question can be raised: What is the probability that the "pure logic" is wrong? Well, there may be factors which have been overlooked, but by definition, if they have been overlooked we cannot be aware of them. Finally, history shows that when a Primary Trend changes, vested interests have too much at stake to be honest in their prognostications. No professional who is fully invested at this stage is going to be calling a Bear Market, even if he believes it. You can argue that history teaches us nothing. Or you can argue that history has a way of repeating itself because human nature does not fundamentally change. Mission Control, you want to bet against these forces? Be my guest. Me, I'll sit this one out thanks. The absolute fact is that my ego is not involved in this decision in the slightest.(eom) By: BrianB_Aust Reply To #1010 by BrianB_Aust Saturday, 17 Oct 1998, 8:49 PM EDT Post # of 1026 Mission Control - PS Forgot to round off on Rentech. Analysis with the help of several individuals on this Board - and validated to the best of my ability with Rentech Management - has valued Rentech at $3 - $5 on a Net Present Value basis (of course making some assumptions regarding the terms of the TX deal ($1 a barrel royalty to Rentech) and the rate of market penetration (10 years) I regard these assumptions as reasonable. They may turn out to be optimistic, but equally, they may turn out to be too conservative. If someone offered you $3 dollars worth of value for $2 - and the offer was legitemate, for whatever reason - would you take him upon it? Again, my decision to remain invested in Rentech (and recently buy more) was based on pure logic. Again, ego had absolutely no part of the decision. Based on the fact that my average entry price is substantially below what my analysis tells me Rentech is worth, I am quite content with my conclusion that I am right and the market has got it wrong on Rentech (for the present). In the end analysis (a large proportion of the market - the Institutions - have not yet passed judgement). In Rentech's case, "the market" is currently made up of private individuals only a small proportion of whom have done their homework. Is it arrogant to conclude they have got it wrong? I don't think so.(eom)