Forum Archive Index - July 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi ryanrite,

Just in case you haven't figured this out.  This is ITC all over 
again.

IMHO ITC still has a very impressive portfolio of investments, and 
given it is a year since the tech wreck and they have a years 
development under their belts I suspect that from a product point of 
view ITC never looked better.

So why is the share price of ITC languishing?  It is because 
sentiment has changed.  Investors have become less patient waiting 
for the returns to come in.   And ITC have no on-going returns of any 
substance.  So the share is priced more or less entirely on sentiment

>
> Wow micromedical Industries Ltd (aus)   MMD
> I see the Americans have beaten MMD to the human implant of the
> Artificial heart This must be why their share price has been
> falling? Will it stop falling? 
>

Yes.  When is a harder question

>
>
> How much good will is there in their price?
>
>

The answer is 100%.

There is nothing but goodwill in their share price of MMD.   They 
have no earnings and the time when their income will exceed their 
marketing expenses is too far ahead to predict.

>
>
>  When will they start their human implant? Should one exit now
> or wait for good news???? Any ideas anyone????
> 
>

I suspect MMD is worth somewhere between $1 and 10c.  And not only do 
I have no idea which valuation is closest to the truth.  There is no 
way to know it.  It is a classic high risk high return situation.  
It is the sort of company that Buffet wouldn't touch because he 
couldn't understand it.

Does this mean it is a bad investment?  Not at all.   It could still 
turn out to be a real winner, but as to when, well who knows?

>From a long term point of view the way to handle an investment like 
this is to buy in cheaply before most people notice the share.  Then 
when the investment doubles sell out half of what you own in it, so 
that what you have left in there is 'play money'.   Then ride the 
growth.  If the steller growth continues you'll do well.  If it 
fizzles you will still have the amount of money that you started 
with, and you can go looking for ther next punt.

It is the same question as if you asked what the true value of ITC 
is, 10c or $1?   The answer is both, depending on the sentiment. 
SNOOPY



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