To: robert miller who wrote (2306 ) 3/11/1999 7:59:00 PM From: michael r potter Read Replies (2) | Respond to
Robert, Wouldn't read to much to it other than short term overbought, [not a negative in this case.] The upper band will turn abruptly north, and very quickly SFE will be within the bollinger bands again. I have not found them a useful tool. Contrary to what seems common sense and what many believe, I view SFE as one of the least risky stocks to own for the short to mid term--especially and because of a move like today. The reasons all go back to supply and demand. Other than short, sharp pullbacks which are a certainty [normal profit taking], today set the tone. Everyone who owns SFE before today has a profit. No one will be selling to "get back even". More importantly it has re-cast itself today [elaborated in post earlier]. With a low float and the potentially huge demand coming from new investors who will want in, the door is very small and not accommodating to large numbers squeezing through. For the short-mid term, almost any significant bout of profit taking will be met by a crowd at the door clamoring for a piece of the action. IE. The amount of people who own it compared to those those that don't own it but either want to or will want to is unbalanced and will remain so [accumulation]. That will severely restrict any significant and long lasting pullback for quite a while. This is why the opinion of low risk. Think about this. If investors want a piece of E- business to business now, they can buy VERT at $110 or $120. Or they can buy GE,CPQ, or Comcast to get their interest in ICG. Of course they are to big for ICG to mean much. Or they can wait to get ICG as an IPO in which case they will be out of luck as the door will be paddlocked until the after-market where they will pay a ransom. Or they can get SFE now [and their 26% interest in ICG] on the market and get a stock with $20 to $30 of other real assets as a cushion and the rest is a fair shake at ICG with some downside protection and no waiting. What will they decide? Compare this to stocks hitting new lows that appear "cheap". Now there is short term risk and a crowd inside waiting to get out even [distribution]. Best wishes, Mike
