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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Fred B. who wrote (57500)	4/26/1999 7:02:00 PM
From: Mama Bear	Read Replies (3) \| Respond to of 132070

Fred, I just wanted you to know that stocks go down, even in a mania. It's really silly to conclude that because the indices are up that one who is inclined to short or buy puts has lost money. I am actually inclined to believe that shorting is easier in this mania, because the rabid bulls push things up that don't deserve to rise. My best position last year was a short of CFON. The insanity pushed the price up to 15 1/2, which is at least 3 times any credible price for the company. I shorted it all the way up. For some reason I don't think that situation would have happened in a non mania market. Perhaps someday I will be fortunate enough to find out. You also seem to ignore the truism that higher prices increase, rather than decrease risk. You seem to believe that because prices are up, that the bear thesis have been proven incorrect. I do not believe this to be true. Like CFON, there will come a time when folks realize just how ridiculous this whole thing is. When that inevitable event occurs, it will be the folks who have no clue how to successfully play the short side that will have the deepest regrets. Barb

To: Fred B. who wrote (57500)	4/27/1999 6:50:00 AM
From: Earlie	Read Replies (1) \| Respond to of 132070

Fred: Thanks for your post. I read it over carefully. Your main point, it appears, is that IBM's added PE relates to the fact that we have moved from a manufacturing economy to a service economy and that IBM is moving in parallel with this shift. If I left any other point out, by all means, correct me. I view it differently. I actually worry about the fact that our economy is increasingly dominated by service rather than manufacturing. There is an old expression that relates to the fact that "servants are the last to be hired and the first to be fired." While the view is old-fashioned, I continue to value a company's stock in terms of its earning power first, and its assets second. For three years, IBM has provided almost negligible growth in earnings even as its assets have shrunk. Neither of these facts support a four fold rise in the price of its stock over the same time period. Best, Earlie