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Technology Stocks : SIEB Siebert Financial Brokerage -- Ignore unavailable to you. Want to Upgrade?

To: James C. Mc Gowan who wrote (250)	4/16/1999 4:39:00 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 284

I made a discovery about SIEB today: there is this perception on the net that SIEB is a classic pump and dump stock and I must admit that I used to believe that myself too. But to help me trade SIEB better, I've been watching AMTD as my leading indicator. These two correlate very nicely and in fact, SIEB has been outperforming AMTD! Here is how you can prove it to yourself: -- go to bigcharts.com and choose to plot SIEB in the interactive mode. -- In the "Compare to" window, type in AMTD and choose to plot SIEB for the past 5 days in 15 minute intervals. This plots both SIEB and AMTD intraday on the same scale. notice how closely they follow each other. Repeat this for a 2 (or 3) month chart. The correlation holds well for daily charts as well as intraday charts. The implecation is that unless you believe AMTD and SCH are also pump and dump stocks, what we are seeing here is a sector correction after big gains. The other interesting thing that I noticed is that money flow into SIEB has been positive despite the downward trend. You can check this out by plotting a 2 day intraday graph at 5 or 15 minute intervals and choosing "money flow" from the bottom indicators. I read these tea leaves as positive, given that volume seems to have dried up and the selling seems to be over done. I am not too happy that we did not finish at a higher level, but niether did AMTD and today was the option day. All bets are off if the whole tech sector tanks. have a good weekend, Sun Tzu

To: James C. Mc Gowan who wrote (250)	4/17/1999 6:10:00 AM
From: Randy Elder	Read Replies (1) \| Respond to of 284

James: Many things have changed the world over the course of history, but impact on our lifestyles and profitability as a business are two different things. I simply cannot buy this concept of a new era in which valuations do not matter in a cyclical industry. Obviously, people who believe that valuations are irrelevant have been richly rewarded over the past couple of years, especially in internet stocks, and I expect some businesses that have a decent chance at protecting there market share to justify at least a reasonable portion of their lofty valuations. Look at what has happened in the I-broker sector over the past couple of years, though. There has been an explosion of new businesses set up to take advantage of the growth and they have had to do their best to differentiate from each other by either offering lower prices than their neighbors or premium service in some way or other, resulting in thin margins. That is probably why MER was resistant to joining the party, and SIEB is in the same boat of losing revenues from their discount brokerage services due to defections to the web. Lastly, these stocks are selling at huge multiples to their sales in the midst of a stock mania in which day-trading is in vogue. I am old-school enough to believe that bear markets have not been abolished, and when the next bear market hits, the same thing will happen that has happened in every previous bear market. People will no longer view stocks as the only possible place to park their money and trading volumes will shrink, resulting in a squeeze on all brokers' profits, which is why brokers have traditional not been values at high p/e ratios. Obviously this is all relatively long-term stuff and by no means precludes SIEB from going to 100 next week, but a reality check never hurts. Happy Trading