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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: accountclosed who wrote (36300)	11/15/1998 11:03:00 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 132070

roq. nice points about the self fulfilling prophecy and lack of actual critical thinking. i'll never forget how, when mu raced from $45 to $60, that i was told mu would have a great 1998 and that i was, and i quote, wasting bandwidth" by saying that the dram price collapse that had already started would impact mu's future. this person believed the stock price was a better indicator than the actual price of the dram itself. i tried and tried to make the point that the stock price was perception and that perception was a long way off from reality... to no avail. i was resoundly (sp??) told i was a dope and that the stock price was reality. i was the bandwidth wasting village idiot. for about a week. ;-) then mu cratered almost straight down to $20. it was a thing of beauty. :-)

To: accountclosed who wrote (36300)	11/15/1998 1:33:00 PM
From: Knighty Tin	Respond to of 132070

AR, There are two basic types of momentum players. All of them claim to be the first type, earnings momentum buyers. That is where the Microsofts and Ciscos hang out. The thesis is, there is no overvaluation as long as the company makes its numbers. Which is insane. This type of co. falls either when eps disappoint or when the market sobers up. For example, Coca Cola was an earnings momentum co in the 1970s. It did not see a huge fall in its eps growth, but it did see its multiple fall to 8 times from 45 times. And that shmarted but good. <G> However, stock price momentum players are the type who buy Iomega because it is going up and is being bulled. Earnings only matter as another bullish factor. This is where I prefer to fish for puts, though it can be tougher than playing eps turnarounds. Since there is no basis for running the stock up, there is no reason it cannot go up forever. I bought puts on Presstek from $50 to $200. Had it gone to $1000, it would not have really been any more unreal than it was at $50. There was nothing there. But, fortunately, these things always correct. And my 90/10 and thirds techniques are designed to keep me in the game until they do. With the eps momentum stocks, fundamental analysis is as important as research. Micron would have never have cratered had its eps held up. Forecasting their fall made me money on that put play and many others. Most momentum players are really price momentum players. They use the eps momentum as an excuse to justify buying what went up yesterday. One salient factor is that momentum players could care less about valuation. These are really separate but related areas for picking put stocks. I love it when I can see a fundamental slowing in eps on the horizon. But I also like to play those stocks where the herd is just buying them for no reason whatsoever. Yes, steel is a commodity. So is oil and platinum. The point is that with commodities, the dumping eventually stops as the weak go out of business. Or, they ask for IMF support, and the IMF demands constraint on capacity. And, then the commodity cos have their day in the sun. This is a classic investing technique. You only have to factors to master: picking the surviving cos. and timing. <G> See, ain't that easy? MB