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1.Whether one believes a 12.5% + or a 20% decline constitutes a Bear market
is not the point.We are in a downdraft of significance no matter what a
chart seems to say right now.A 17% decline IS significant and one must plan
accordingly to stand aside,heddge,buy sell or whatever.Some of the key
points made in my previous post even came from some Barron articles of merit
and not editorials.
2.Portfolios require aset allocation and if one can not see that at least
10% dedicated to that arena is prudent on some basis then their investment
objectives are different than mine and that is OK.I admit I have a
predjudice here because one of my Profs wrote a major text which I studied
re.fundamental and value investing.In the long run it wins out.
3.Abelson has made good calls but as any editorializer he has also been a
shoot from the hip person for attention.Not bashing..just balance.He once
brought out the worthlesness of Keystone Medical Corporation pointing out it
was being shorted by a California specialist firm and they shorted more than
was in the float but the stock would not go down.I made personal contact
with him and told him the firm would buy the stock from a founder who I
identified to cover its shorts and they both would make a fortune...that was
non-disclosed and illegal and also caused the downfall of the company
because its access to second round financing was shut off with its price
collapse.He never even wrote a follow-up after what I explained would
happen,happened.So I do look for his gems but with a jaundiced eye.And I
still think there are decent articles and info in Barrons.
4.Lastly,why look at OTC-BB Internet or Tech stocks-
A.The chances are 6 in 1,000,000 that a high tech company even goes public.
B.Fewer than 10% of the funded start-ups go public.
C.On average only 6 out of every 1000 business plans even receive funding
from venture capitalists.
So the very fact one is public makes it worth a look because of the hurdles
it has jumped.Just take a look at the 52 week low of CNXT,LTXX and HLIT to
name a few.
Source:BUSINESS 2.0 March 2000 edition.
Sincerely,
John
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