Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Greg Jung who wrote (4892)	5/1/1999 3:04:00 AM
From: Andrew Vance	Respond to of 15132

That is indisputable. The comments by Niles probably did factor into that run up. And yes, TXN did benefit. at the end of March, MU was still at $50, which still represented a great profit. However, once the stock got as high as it did and I owned as many shares as TXN did, I would be looking to dump. Knowing I had to wait until end of March, you could bet your last dollar I would be writing Calls against the shares. If you think MU's run up was a manipulation by nefarious characters like INTC, TXN, or Niles type individuals or institutions, you will not get any arguments from me. From what I read on the TXN-MU transaction, TXN recouped more than a decade's worth of DRAM losses in this transaction by selling their DRAM business to MU and deferring the royalties going forward. That is impressive. We also thought that MU stock would collapse as INTC and TXN reduced their positions in MU. Do you think that INTC is going to be as heavy in MU shares now that they are looking for alternatives to RMBS RDRAM? As I stated, hanky panky goes on everywhere but the ability to ferret this junk out and see it for what it is, helps us invest a little more wisely. Three final stock comments, hopefully to illustrate a point. 1. AOL-YHOO-EBAY-AMZN - I wouldn't own these stocks even if you gave it to me a year ago. PEs and earnings do not support the valuations. However, no one really gave a damn and these stocks were manipulated up to unrealistic levels and then split to allow more investors to come in. Once you realized it was nothing more than market herd mentality and blind stupidity, you jumped aboard these stocks and play along until you see the bottom start to fall out. Moral: As long as there are suckers chasing a dream of success years down the road, stocks as these will prevail. But woe is the person left holding the bag when these world's come crashing down. 2. ANAD - within the past year, this company went from ~$9 to $24 due to the products they sell and to who they sell them to. A semiconductor stock that is doing all the right things. Same holds true for solid companies like ADI, MXIM, VTSS and a few others, given the markets they serve. World's apart from the microprocessor and DRAM bloodsuckers. 3. AMTD - $5.63 to $188.38 trading range over the past 12 months for a 35X return in a year. This is a cross between the two above. PE is high at 330 and really is overvalued. However, if you consider this an internet stocks instead of a financial stock, you see that it may be well worth the price you pay for it. Online investing is growing as well as volumes being traded. these guys are replacing the retial brokers as investors take charge of their own accounts and bypass traditional commssion fees. When you factor in the Day traders and their personal execution systems, you then look to the logical progression. Somewhere in the not so distant future, I see companies like AMTD providng a similar type service (if not already doing so). Online brokers collect fees on both the buy and the sell AND on the spreads between bid and ask. That is one of the reasons their fees are lower than that of the dayt trading companies that allow you to deal directly with the market makers. SO, in the end, online brokers are a growth industry that is printing earnings now and improvements do not come with huge capital outlays. Now, I am not plugging AMTD but illustrate a tech idea that should make money going forward. The same is true for the semi stocks mentioned in #2. However, we do not see what the stocks in #1 really have to offer, even though they have been bid up. I think that ANAD is an unknown stock to most and has the least amount of manipulation and is a value play with sound underlying fundamentals. It is a boring stock that is doing rather well because it has the numbers to support it and the business to support it. AMAT will report great numbers on May 18th and we know the manipulation of this high profile stock has begun. First we best down the stock, which causes almost all of the other stocks in that group retreat. Then the heavy Call buying occurs going into earnings since the #1 semi equipment stock can be moved. This will filter down to other stocks. It will move the sector. CPQ has a poor earnings showing and the entire PC sector crumbled for awhile until IBM reports great numbers and rises in dramatic fashion. Now we start poo pooing the IC sector based on DRAM pricing and AMD's less than stellar performance in manufacturing. This creates an earthquakeacross the entire sector. I think what I am trying to say is that the market is manipulated in many ways and by many factors. A simple reprint article in the NY Times months ago, recapping some old information relating to EntreMed caused the stock to open close to 7 times higher than its previous friday close before collapsing back down to more realistic levels over the following weeks. Sometimes the manipulation is unintended and people just jump on an idea. Central to all of this are the market makers that act in collusion with each other to "fix" prices in some form or another. Everytime an institution goes on a selling spree and the MMs find out about it, they give the stock and those fund managers a big haircut. We are agreeing with each other but the manipulation is sometimes global vs specific. We call the global manipulation by another name. we call it "Sector Rotation". IF the market were truly a level playing field we would not have sectors and would evaluate companies on their own merits. The market seems to bw driven more on perception than underlying fundamentals these days. Have a great and enjoyable weekend. Andrew