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To: Chuzzlewit who wrote (96823)	2/10/1999 4:12:00 PM
From: On the QT	Read Replies (1) \| Respond to of 176387

Hi Chuzz, Lets say maybe for now. Stocks split generally because the management see it as an advantageous thing to do. Most of the times they are right. The overwhelming majority of those stocks that split, were split because the price was perceived as high and splitting would afford some advantage to the appreciation of the stock. They got high by performing well and most likely in a fundamental way as opposed to the new Internet valuation problem and performance. I can imagine problems if the Internet stocks were to split! On the other hand, I would be surprised if these past studies were to bear fruit with these stocks that could not fundamentally sustain their upward momentum for an entire year without earnings and therefore in my mind continue to grow as a group and positively affect that 4% increase. Therefore, those that performed fundamentally well in the past have had to contribute mightily towards the overall improvement of stocks that have been used as the entire universe of stocks ( those correctly split, those that continued to perform well, those that show no appreciable advantage in splitting and those that split for reasons that had to do with avoiding NASDAQ reporting rules.) Now the " maybe " is on board not because your comment is suspect but rather because the studies I quote are second hand,although probably well based, are not clear what is meant when "split stocks out perform the market by 4% +". As you know, this may not be literal in that "out perform the market" may not be the entire universe of stocks available for play but rather a representative referral to a group of stocks like the S&P 500. If the S&P 500 were used as in the old buy an hold studies ( as opposed to the newer and most likely more representative Wiltshire 5000) and not the entire universe of stocks available for play, we have a different situation. Lets put Wiltshire 5000 is aside as it is relatively new and was not probably not used at the time. If it were, that would only serve to make our findings more useable. Assuming that we have a number of possibilities: 1- The entire split stock universe. 2- The entire split stock listed on the major exchanges 3- All stocks available for play. 4- All stocks listed on the major exchanges. 5- All stocks listed on a representative index of the market such as the S&P 500. 1 and/or 2 to be compared to 3 and/or 4 and or 5. If we use 1 compared to 3 we run into real problems with the logic you expressed. However, in fairness to you and in the light of the copious amount of insightful and really ground breaking posts you have made I take you comments in the spirit in which it is probably meant. Let us assume that to have value to our general on going discussion on improving on buy and hold by what ever means to include stock selection and asset allocation and to include the proper use of option play and yes even margin play and of course various TA forms vs. FN forms) These studies regarding splits (if they are to be believed) and if pointing to those stocks, let us say that are listed on the S&P that have split and compared to those stocks listed on the S&P that have not, than we have a marriage perhaps of our goal to effectively improve on buy and hold! That then is my focus. Lets perform on the cutting edge of what is not generally in the market yet valid for us. If we can use let us say 2 and or 3 and compare against 4 and 5 and find that yes indeed that the overall play just using lets say S&P stocks that split and creating our own fund or perhaps some enterprising MM creating such a fund S&P 500 Split or perhaps better yet Wiltshire 5000 splits than we could be on to something. I think but can't as yet prove that the reason for the increase is due to the caliber and the past performance repetition of the stocks a year later to the degree to deliver as a group a higher return on investment then its compared peer group. So for now let us give the valid for us as a maybe. Although I personally would bet that your comments are accurate, if not proven as yet because of insufficient information for some, as yet to be correct. It seems what is needed is more information although if my memory serves me will still prove to be somewhat fuzzy it should provide us with a better basis to explore further. Regards, QT Without some additional information we are unfortunately somewhat limited.I'll try to provide more, such as it may be, shortly.