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 : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Michael who wrote (14971)	11/1/1998 10:51:00 AM
From: Pravda	Read Replies (2) \| Respond to of 18691

BT makes a very poor short. Bankers Trust's book value is around $47 a share, so the company is trading at about 1.3 times book value. JPM trades at 1.5 times book, and CMB trades at 2.26 times book. This is why the take over rumors have such creditability: Bankers Trust is trading at a significant discount to its peer group. Bankers Trust was a great short back when it was at $120. Why short the stock now that it's already lost half of it's value? Even with the disastrous third quarter, Bankers Trust has made money for the first three quarters of this year. It's only profitless companies that go out of business. Sir John Templeton had a quote about "investing at the point of maximum pessimism." I believe this is great advise for both longs and shorts. Shorts just need to short at the point of maximum exuberance. Yes, I am long BT. Pravda

To: Michael who wrote (14971)	11/1/1998 1:20:00 PM
From: Roger A. Babb	Read Replies (1) \| Respond to of 18691

Micheal, The following quote is from today's Sunday paper: "L. Roy Phapp, a money manager in Phoenix, notes that, with Treasury-bond yields around 5 percent, near their lowest level in some 30 years, buyers must pay the equivalent of 20 times earnings for T-bonds, which unlike stocks offer no hope of growth. Stocks are selling at approximately the same P-E, Phapp says, therefore it would appear that stocks are a much better value to purchase today." This is the "new market thinking". Historically stocks have been required to have a lower P-E than bonds because stocks have downside risk and T-bonds are safe.