To: mph who wrote (2224 ) 2/3/1999 7:21:00 PM From: michael r potter Read Replies (2) | Respond to
Battle lines drawn-$44-$46. Two opposing forces are battling it out. One the one hand are "old timers" that have held for years and watched it hit $45-$46 and subsequently drop to $17s. Trick me once shame on you, trick me twice, shame on me. They don't want to be tricked again. Sell at the old highs. Also selling, are "new timers", in during the past two months and holding outsized short term profits. Then there are the true believers who hold SFE as they would their grandfathers railroad watch. They are not a factor. On the buy side, are mostly the newly converted, internet big-mover crowd. Their definition of value is not quite the same as that of the old days [last year]. To sum up their valuation methodology: "SFE is a bargain because it is going to go up, and SFE is going to go up because it is a bargain." or "compared to CMGI, SFE is_____ [fill in the blank with any number of glowing comparisons.] Possibly some technical types have been buying as the technicals have been stellar. So far, the buyers have had the upper hand. $44-$46 is a battleground. It will be interesting if SFE can breach that resistance by the Vertical Net offering [SFEs internet coming out party] date which may prove to be a short term psychological peak and sell signal for some of SFEs newly converted. If it can overcome $46, then the sell at $44-$46 triple-top crowd will, by definition, not be a factor and everyone who owns will be at some profit. Resistance will be diminished. Traditional valuation concerns will be largely absent, because todays buyer has totally different valuation methods, that will allow virtually any premium above NAV, and their legions are growing as word of SFE spreads. What makes it so interesting now, is the potential Verti-net IPO offering [and psychological peak?] almost coinciding with this resistance level. A Verti-net offering at the end of next week would be much better for the bulls, as this would allow more time for this resistance level to be breached [which could happen any time now]. Even if the Vertical Net offering is a psychological and price peak, longer term SFE should plow higher, as word spreads and the panting begins anew over an IPO of Internet Capital Group. Definitely more interesting than the Super Bowl. In a strange way that does not make intuitive sense, but may make perfect sense from the standpoint of expected money flows, risk in SFE may be quite small at this point [say $5-$8] . Time will tell. [Disclaimer, despite some good calls, this writer last spring thought the downside was small, and the upside was large [SFE then in the upper 30s oops]. Time will tell, if learning and analysis has progressed to the point where these posts are offering insight and predictive value or are just a lot of self indulgent hot air. Good trading/investing, Mike
