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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (180)	10/22/1998 4:28:00 PM
From: Scott H. Davis	Respond to of 10709

Sun, this may be below your size screen, but you may want to check out EQNX. Solid FA, good tech. reputation & growing position in remote access, several strong OEM arraingements. Little export volume. Scott

To: Sun Tzu who wrote (180)	10/22/1998 8:17:00 PM
From: jttmab	Read Replies (1) \| Respond to of 10709

Sun et al, An equity that fits most of the criteria mentioned is THQI. Good balance sheet, Market cap about $200M, no Asian exposure. Excellent margins. Growth rate may be a little low for your taste 20%. Coincidently they reported earnings today, beat expectations for the 15th straight quarter. Leading into the fourth quarter a number of new titles to be released. Volatile, but what small cap isn't? Conference call today provided positive forward guidance to the analysts, which was a first time for the CEO. In spite of beating the estimate, he had always discouraged analysts from raising estimates. I suspect this prior approach had a lot to do with the sell offs for the previous earnings reports. One of the major problems that I see for small caps is that they rarely try to manage share value; they seem to hold the view that they can't influence the market. It seems one has to look to a few large caps to find the CEO that actively manages share value. DELL and AMZN come to mind. Some obvious risks. THQI doesn't have their own development them, they license and distribute (which does give them the high margins). I think they may be approaching a level where to continue growth they will need to add development teams and/or acquire. Each has their own implications towards management, margins and the certain hit the stock would take during an acquisition. On the other hand they are in a reasonable cash position, excellent margins and might be an acquisition target themselves. There is also a large short interest in the stock which one should be aware of. Most stocks I can at least understand why shorts would take a position. Here, frankly, I'm stumped. If anyone looks into this I would appreciate any insights into any rationale for a short position. I wouldn't suggest an entry point...as I reflect over my history, picking entry points is not my forte. But the folks here seem quite capable. Best Regards, Jim

To: Sun Tzu who wrote (180)	10/22/1998 8:31:00 PM
From: rich evans	Respond to of 10709

Try the ECM area. Companies like DIIG, PLXS, JBL, FLEXF. OUtsourcing supposed to be the key to growth next 5-10 years. Rich

To: Sun Tzu who wrote (180)	10/22/1998 8:37:00 PM
From: Waldeen	Read Replies (1) \| Respond to of 10709

Sun, I've been counting on this strategy taking place.... "Thanks GM. Remember what I told you in my first post here. That the big caps will lose relative strength and the small caps will storm ahead. I see a few early signs that this is unfolding according to schedule." and it is starting to work, as you said. It does seem to be coming faster than at least I expected. But, Until recently, couldn't decide what would get people out of the large caps... there has to be an incentive to move into the small caps. The incentive is lack of downside risk. If you have new money, and it's going into the market, small caps got hit first and hardest. Alot of the good small caps fell unjustly with the bad. The only thing that bothers me, if lack of downside risk is the driver for small caps rallying, is the 'internuts'. Until all of the large caps feel risk, aren't people going to shuffle between them? Until stocks like Amazon fall (using Amazon as an internut barometer), can small caps really rally? There is tremendous capital in these internet stocks. Don't think you are going to get all three wishes in a company: "financially strong, dominant in an expanding market, and with great potential for top line growth" but if you do let us know. Would suggest you look at PAIR, though, as it has low downside risk (under stock buyback), trading near low. They are not clearly dominant or exhibiting strong growth, but the potential for being in an expanding market is possible with new products. And, they are admittedly looking for an acquisition for growth going forward. Have had a small evaluation position since $7. One can also argue that their market consists of customers who are in a traditionally defensive sector: RBOC. Little downside, larger upside and easy to park a little cash into at these levels (with a Stop). Take a look, tell me what you think? Other than PAIR, would have to agree with Tim Luke's XYLN pick. Waldeen