Strategic Stock Research

Looking Ahead at Internet Trends and Your Money Opportunities

Strategic Stock Research 
By: Charles von Ryan

The Globalization of E-commerce

Despite advances toward freer-trade globally, most governments exercise some control over merger activity and industry concentration within their domestic economies. The multi-nationals are aware of this and rather than getting caught up in regulatory red tape that could go on for years (in technology, obsolescence is measured in months, not years), strategic
alliances or partnerships are springing up world-wide to avoid government regulation.

The most recent example can be found in the announcement by IBM and its 7 world-wide partners, Japan's Matsushita Electric Industrial Co. Ltd., Hitachi Ltd. and Toshiba Corp., South Korea's LG Electronics Inc., Canadian Nortel Networks Corp., and U.S. Solectron Corp. and Seagate Technology Inc. to create a joint venture in business-to-business e-commerce. The joint
venture will provide an online marketplace for member companies and their customers to buy and sell components used in consumer electronics, computers and telecommunications equipment.
(June 7, 2000)

24 Hour Global Trading on the Horizon

With the announcement by the New York Stock Exchange and seven other international exchanges (the Tokyo Stock Exchange, Hong Kong Exchanges and Clearing Ltd., the Australian Stock Exchange, the Toronto Stock Exchange, the main Mexican and Brazilian exchanges and Euronext, a merger of the Paris, Amsterdam and Brussels stock markets) that a 24 hour global stock
market may soon be a reality, investors should start preparing themselves now by investigating the many world-class companies trading on these exchanges.

As investors begin to trade globally, it will become increasingly important to understand more about each of these other economies and the particular opportunities that may be available. One risk management consideration is the currency an investor may use in the purchase or sale of an equity. There may be exchange rate advantages in purchasing certain equities with the local currency, particularly when considering the large gain the US dollar has made against many if not all of the world currencies. Buying these foreign equities in foreign currency is one way to control the downside that would otherwise occur when (not if) these foreign currencies rise in value against the dollar. 
(June 7, 2000)

The Globalization (Concentration) of Auto Manufacturers

All investors are aware of the Chrysler and Daimler-Benz merger but are they aware of all the other strategic alliances that have consolidated (the politically correct way to say "concentrated") the automobile industry world-wide.  Look at General Motors. GM has an interest in the following car makers: Fiat, Subaru, Izuzu, Suzuki and Saab. Ford meanwhile has an interest in Mazda, Volvo and Land Rover. Daimler Chrysler has an interest in Mitsubishi. 

Some of the other major makers are at risk of take-over include South Korea's Daewoo, Germany's BMW and France's Peugeot-Citroen. The likely suitor, still unknown. Look for those industry leaders rich with cash or a high stock price to be the likely successful bidders.  

What does this mean to the investor? Consider investments in innovative companies with a demonstrated history of success as they may be ripe for acquisition (BMW and Honda are two that come to mind). 
(June 8, 2000)



  Tips For the Novice Online Investor

Part 1

Tips For the Novice Online Investor ( Part 1 )

1. Keep a small position in high risk bio-tech or pure tech companies as one of these companies may ultimately become an industry leader resulting in a huge windfall for you;

2. Re: tip #1, this position should not exceed 5% per $100,000 of your investment portfolio (less if you are a worry wart);

3. Re: tip #2, these investments should never be within a retirement savings account due to the risk

4. More re:tip #2, if you don't know which high risk companies to buy, look at the many on-line sites dealing with investment information or, better yet, get your hands on a report from a leading small-cap tech or bio-tech fund, (look at the companies listed, and then do your own due diligence on these companies);

5. Maintain a commissioned broker account and "drive by" some of your selections just for a sobering opinion; (whether you advise your broker that you have an on-line account somewhere else, I leave to your own consideration)

6. If you get lucky on one purchase, stay on top of it constantly for a decision on "running with greed" or "taking a profit". if you get lucky on most of your picks you either should become a full time day-trader or, more likely, you are seeing the 1st sign of an impending correction that is about to wipe out 20% of the value of your low-medium risk stocks and 50-75% of your speculative high risk stocks. 

Charles von Ryan for

Tips For the Novice Online Investor ( Part 2 )

It's been 6 months since I penned part 1 of this series. Lots of money has been lost by investors all over the world. An unfortunate reality is that a great part of the loss has fallen not on the large institutional investor, rather, on the shoulders of the small, individual investor, often a novice.

If you followed my advice in Part 1, you shouldn't be too badly affected (although even I admit that it's hard to confine your speculative plays in tech or bio-tech to 5% per $100,000).

What do you do now? The Fed has reduced rates by 1.25 %, and although there was an initial response (huge jump in the Nasdaq) all has basically petered out once investors realized that such a drastic rate cut was due only to the serious belief that North America is quickly advancing into a recession.  After all, it was the 1st time in 20 years that computer sales actually

TIP #1
Hold on and do nothing. If you are lucky to have an individual stock that has performed well, you might want to sell and to consider a purchase of a chip maker such as Advanced Micro Devices (AMD:NASDAQ) or Intel (INTC:NASDAQ) or, if you think George Dubbya will order the Justice Department to leave Bill Gates alone [and you think there is a huge upside in video game platforms that offer internet access (read X-Box for kids)...I'm a believer], look at Microsoft (MSFT:NASDAQ).

TIP #2
There is a growing fear that many American financial institutions will face bad or impaired loans in the next 2 quarters, especially as the economy in the US slows. You may want to unload some of the US banks and buy some of the Canadian banks (less overall competition; high yielding dividends; merger and acquisition possibilities, and cheap in US funds (after all, a good risk going forward is betting that the Canadian dollar will rise against the US dollar).

TIP #3
If all of the above sounds too risky, and it may be for some of you, consider a few mutual funds that have a demonstrated track record and if you don't mind watching paint dry, this might insulate you from the volatility that is sure to continue for the next 12 months. Ideally, I would have 5 funds: large cap US(30%), small cap US(30%), an international fund (10%), and in smaller amounts, 2 sector funds, 1 of which should be technology (15%) and the other, in life science and bio tech (15%).

TIP #4
If tip #3 seems to risky, buy a guaranteed investment certificate and get back to the TV, you may be missing something on the Jerry Springer show.

Charles von Ryan for FutureCents (January 5, 2001)



Get Ready To Play

Are you an investor lucky or smart enough to be sitting with a bit or a lot of cash. You survived the recent Nasdaq correction having learned to buy quality and to stick with it for the medium to long term. You have also learned to sell junk when it's at a high and in demand by less informed investors. You are also a believer and follower of the simple "buy low, sell high" theory.

Well, it's a rare day when you can point to a clear cut example of how you can profit from this theory. An opportunity is available right now and it deals with video and computer games makers, such as my favorite, the blue chip of the video game industry, Electronic Arts (ERTS). Another opportunity is 3do Co. (THDO). These companies have near-bottomed despite being profitable. Also note that ERTS has signed an exclusive deal with America Online to feature on line gaming.

The stock prices have been depressed due to the slow down of sales of various games due to the consumer not wanting to spend big money on these "old" system games when the new Sony PlayStation 2 will be coming out this fall (as well as a new products from Nintendo and Saga, not to mention the new Microsoft X box to be introduced early next year). It is reported that these systems will all feature on line capability. Thus, there will be great sales and revenues but not until the new hardware gets in place in the next 6-12 months.

So if you want an opportunity to buy low and sell high it is this sector, right now (you should do your own due diligence and if this takes 1 month you should still be ok). ERTS is trading at $62 13/16 (52 week high $124 7/16, low $47 5/16); THDO is trading at $5 9/16 (52 week high $17 1/8 and low $4 1/4).

Charles von Ryan for FUTURECents June 15, 2000



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