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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector -- Ignore unavailable to you. Want to Upgrade?

To: kolo55 who wrote (1865)	10/20/1998 9:02:00 PM
From: Ron Kory	Respond to of 2542

There is a nice article about CLS published by CMP Media that I am having trouble posting to this thread. I would be happy to e-mail the article to someone who would post the article to the thread. It seems to be an overlooked company on this board. I am certainly encouraged by the 20% rally the Russell index has posted in the last 10 days. This is the most broad based rally the market has seen since the small caps bottomed April of last year (the Russell rallied about 35% from bottom to top before stalling out). What strikes me as interesting apropos the small caps is that mutual funds must declare their taxable gains and losses as of October 31 which usually leads to tax loss selling in October. It is possible that small caps were sold aggressively as mutual funds sold their long time leaders this summer and so their tax loss selling was done earlier than usual. Individual tax loss selling usually peaks between November and early December. It is quite probable that we will have some partial retracement of the recent rally and that another bout of tax loss selling will keep a cap on the small caps until December. ron aarcor@aol.com

To: kolo55 who wrote (1865)	10/21/1998 12:13:00 AM
From: Douglas V. Fant	Respond to of 2542

Paul, Correct, Sequential declines in revenue for AFLX- but the 30% increase quarterover quarter in bookings suggests that the third quarter is bottom.. I'm sorry that I missed the bottom in Checkfree! I usually watch that stock but not recently. Same values in small cap telcomms. I'm in AFCI (44 down to 4) and DSP (27 down to 5). Small/mid cap ECM's and telcomms offer some real potential here. If you have time go over to our latest issue of Lonestar Growth Investor @ members.aol.com and read the featured articles on small cap stocks. The authors confirm your thesis re valuations and the year 1974.... AFLX btw even with its 36% gain today still trades below book value.... I do not think that we are being unreasonable expecting 200-500% gains in some of these stocks over the next 12-18 months...And I base this rate of return on the assumtion that small caps return to only 50% of their previous 52-week highs... Sincerely, Doug F. Sincerely, Doug F.

To: kolo55 who wrote (1865)	10/21/1998 12:29:00 AM
From: Douglas V. Fant	Respond to of 2542

Paul, A small blurb from the Charles Sivy November Money Magazine Article posted at the Lonestar Growth Investor Website - "Don't expect the window of opportunity to stay open for long, though. Many mutual funds realized capital gains this year. And if those funds still own any depressed small stocks, they will be tempted to sell them to generate tax losses. So will some individual shareholders. This tax selling could hold prices down in the short run but will be almost entirely over by November. So the January effect (the rebound in depressed stocks after tax-selling ends) could start early. Investors who wait until Thanksgiving to buy small stocks may arrive late to the party."