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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: Susan Saline who wrote (13269)	4/24/1999 6:30:00 PM
From: LastShadow	Read Replies (4) \| Respond to of 43080

"Valuation is in the eye of the beholder." No, it isn't. Valuation is a real and measurable item. And its rather simple to determine. You take the value (cost to replace, duplicate, recreate) of the buildings, equipment, intellectual property, money, and whatever the market influence is worth (albeit sometimes hard to determine) and subtract off the debts and liabilities. And that is precisely the problem a lot of people are seeing. Traders don't make money from the growth of the company, or the value of its productsand services, they make money off of other's making less timely buy and sell decisions. Where as Sue made money on ONSL one month, and lost it another, it had no material bearing on the company, other than that the collective effect of the people pushing stock prices up or down allowed them to leverage that share price into some measure of the worth of the shares they still held as a corporation. It wasn't some major fund or financial institution or bank that paid out your profit, it was other traders less well informed and gifted. And that is really the issue, and not whether there is a bear or bull market, which by the true definitions we are in neither. Bear and bull markets are defined by the % change over a period of time, and technically we are in a horizontal correction of a Bull plateau, and it can continue oscillating, continue up, or go down from here. After it makes that trend chage, then one can say whether its a bear or bull market. That is where the conflict is coming in for the market analysts - the makrket is doing things that are classic of both an over bought and continued bull market. But some seem to think that one has to be in one or the other. You don't have to. Right now there is a ton of money coming into certain tech and internet sectors and they are behaving unpredictably. But that will change because not everyone is as good at trading as Sue or Jay or Tom or Dave or others. In fact, they are rare. Every experienced trader knows that just about anyone can make money in a bull market or when there are huge trend swings of 15-25%. Three years ago it was unusual that a stock would go more than 20% on an uptrend without a selloff. For tech and internet companies, that isn't true, but what is also true for them is the massive corrections they take when reversing. IBM or GM or GE don't rise to $100 or 200 and then correct down to a third or half that the following day. ONSL does. And there is a reason for that. What you are looking at is the inflated stock price driven by small floats and many small sized orders (check the volumes traded daily now and then - better yet, check out the number of shares traded versus outstanding to see the difference) that does not have the valuation suported by the intrinsic worth of the company's real assets. And I don't mean to generate an argument about whether being an internet portal is or isn't worth something. It is of course, but there isn't a valuation system in place that can say WHAT that worth is. Andd everyone kows you aren't going to buy AMZN because of its earnings or assets, but because the price is rising on trader (not institutional purchases) activity. And institutional purchase is important, and the reason is for stability. The GAP, GPS, is owned 54% by funds. And its priceis only going to go so low and so high because of that. Not a single institution owns ONSL, and because of that, there isn't a soul who will tell you how low it could possibly go. So what the traders are doing is known as 'market timing' and we all know that eventually fails. To confuse skyrocketing internet stock prices with the company's valuation is dangerous, because it doesn't recognize why, say ONSL's price may drop unexpectedly and precipitously. lastshadow

To: Susan Saline who wrote (13269)	4/24/1999 6:45:00 PM
From: tom pope	Read Replies (1) \| Respond to of 43080

Seriously, Sue, we should look into Trader Status. My understanding was that if you qualify for trader status you would have to file a Sched C and pay SE (Self employment) Tax. Anna in Virginia said that this was not the case in a post on the Z thread some time ago. I've sent the Feds my money but have applied for the automatic extension and have sent the Turbotax version of my taxes to my tax guy. I'll raise the issue when I talk to him, and report back. BTW, someone asked me the other day to report what I thought of the RIM program after I'd used it for a bit. It hangs my machine, that's what I think. So I didn't get very far in my evaluation.