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

To: Roger A. Babb who wrote (15901)	12/2/1998 1:03:00 AM
From: larry	Respond to of 18691

Roger & all, have any good short candidates besides the internet issues and crappy penny stocks? I did short AMAT at 42 and covered today at open at 37 9/16. I am not a usual short, but am looking to hedge my long positions for some nice insurance. Looks like that market will remain bullish in the near term. I have really never seen such strong momentum with such poor fundamentals. thanks, larry!

To: Roger A. Babb who wrote (15901)	12/2/1998 9:16:00 PM
From: oexwa	Read Replies (2) \| Respond to of 18691

Roger, I would like your opinion on the XON - MOB deal Elizabeth Taylor and my Mother have some things in common. They both have an interest in Exxon and they are both beautiful ladies. In today's paper, it said that Elizabeth Taylor invested $500 in Exxon and it is now worth $450,000. My Mother's largest holding is in Mobil which is to be taken over by Exxon. Unfortunately, she doesn't have as many shares as Ms. Taylor does. Since this is important to her, I thought I would enlist some of the thinkers on this thread. My thinking is as follows: 1. Both XON and MOB are near all-time highs. 2. Oil is at a 12 year low (adjusted for inflation, it is at a 25 year low). 3. This is not compatible! 4. In looking at their two year charts, the two stocks seem to move in tandem. Therefore, one who is long MOB should hold the MOB and short 1.32 (the ratio) shares of XON. This has the advantages of: 1. Locking in the disparity between the actual price and the offered price, 2. If XON goes up, MOB will rise accordingly 3. If XON goes down, both stocks go down but what one loses in MOB, one gains in the XON short. My brother thinks that 1. They could become disconnected such as TLAB and CIEN, leading to a bad disposition -i.e. XON goes up and MOB goes down, 2. Since Oil is at a low, why limit the MOB's upside? Those are some of the thoughts. I would appreciate other views on how to play this. Thanks, Bob