Posted on 12/29/2001 12:18:35 AM PST by Partisan Hack
Merry Christmas
First, we would like to wish all of you a wonderful tomorrow. Take the time to relish your families, to enjoy your children. In the end as each generation passes into the next, it is only the legacy of our children that we leave behind.
Last night as my younger daughter decorated the tree, I made sure to sit there and watch as she put up each decoration. I remarked about each one. I know that many years from, decades from now part of her memory banks will be her father sitting around while she decorated the tree. If I could give you one gift for you and your children it would be the following. Give your children the gift of EMOTIONAL AVAILABILITY.
This goes beyond caring. It is listening to them with an open mind. It is truly hearing what they have to say without emotional bias, without bringing your private agenda into the conversation. Give them this gift and I promise you that they will marry well, and that they will live happy lives. In the end happiness is more important than wealth. There will always be wealth in this world. So all of us at StocksAtBottom.com wish you and yours a Merry Christmas. Our wish is for all of our subscribers who do not celebrate Christmas as well. We know that if there is a God, then there can be only one God. This God provided for the equal peaceful co-existence of all pathways to his message. Let us all acknowledge this.
And now a Christmas present for you
An associate of mine Chris Matthews has written a book recently called, "Now this is what I really think." What we are going to do right now is tell you what we really think. We are going to go out on a limb on this one because from a business sense we should not propose what we are proposing. You see if we just keep giving you the EarthLinks that move 50,60 percent, or the Boston Scientifics that move 50, 60, 70 percent we will make you happy and keep this subscription service going forever. There’s really no need to go out on the limb and look for the grand slam home run, the one to write home about. This is what we are about to do, so get ready.
In our lifetimes we have had between five and ten stocks that you could retire on. What comes to mind immediately is Home Depot in 1981, 1982. It went public at $12 per share through my firm where I was a limited Partner at the time. Chrysler comes to mind in the early 1980’s. It was $6 per share with bankruptcy threatening. We bought it; it went to $125 per share. Cheyenne Software went from $ 6 to $100 per share in two years. Of course there was Novell Software which an associate mine convinced the Chairman of Safeguard Scientific to spin off. You got a warrant for each share of Safeguard that you owned. You took two warrants and sent it back with a $1.50 and you got a share of Novell in exchange. That share went to hundreds of dollars per share through the years.
Folks, we’re going out on the limb. We think COVAD is the next one. We have a friend named Bert. Bert is worth at least $50 million from investing in the stock market. I learned security analysis formally at Harvard. Bert learned it in the school of hard knocks. Through the years, his school taught me more than anything I ever learned at Harvard. Bert taught me that you have to use your nose to know a stock. With Covad, we are using our nose as well. This stock smells right. This is not a one week, or a one month play. The whole run will take 12 to 18 months. It will be a wonderful run.
Here’s Why
You have a company that has just come out of bankruptcy. The balance sheet is as clean as a Hound’s Tooth. The unwieldy debt amounting to over a billion dollars was converted to equity. All creditors agreed to it. It is the only company that we have ever seen that doubled its sales base in the year plus that it was in bankruptcy. We’re talking hundreds of millions in sales as well. This was a period when our country was going into recession.
The Chairman of Covad recently bought over a million shares in the open market paying a market price. The SEC rules dictate he must own the stock for at least six months before he can sell. If he sells earlier, he loses the profit. Now understand this, he didn’t buy that position to double his money. He bought it to make a killing, and a killing is what we think he will make.
Covad is going up in spite of year end tax loss selling. It’s telling you that it wants to go higher. The stock is literally blowing through its selling pressure. It’s eating alive the tax selling. This is a stock that can explode on the upside.
What we find incredible and only Wall Street professionals can know, is that no analyst is following the stock. That’s zero, nada, nothing. No analyst will touch this stock for a while. When it gets to $5 per share, it has the potential of being re-listed. It must remain at $5 for three months to obtain the listing requirements. Folks when and if this stock gets re-listed; it explodes again on the upside. At that point it could have $10, $15, and $20 written all over it. That’s what we think. We are looking for what Peter Lynch use to call the ten-bagger. That’s a stock that over a period of a year or two can go up ten times in value.
We would not be upset if individual investors this week sold the stocks that they have tax losses in, which would include some of ours and place either a portion or all of the proceeds of those sales in COVAD. Keep in mind that COVAD must be SUITABLE for you. This is not for WIDOWS and ORPHANS. Do not go out and obtain the cash surrender value of your life insurance policy and buy COVAD with it. Things can always go wrong with any stock, and we mean any stock. That’s why you never, ever buy on margin if you are smart. At the same time we feel so strongly on COVAD that we feel it is a MUST OWN idea. If you buy, buy only to your comfort level. We can always buy the tax loss stocks back at a later time. We can not give you a potential ten-bagger that often. Remember as analysts come in and recommend COVAD, it can only go up in price. Their recommendations will create a mountain of buying, and catapult the stock price to higher levels. We will go one better with you. This stock will move quicker from $5 to $10 and higher, than the time it will take for it to move from $1 to $5.
Your Christmas Present to us
Tell your friends about COVAD. They will love you for it. This is a stock to write home about. In our opinion, this is going to be one of the biggest winners we have ever had. It has already increased in price from where we told you to own it. It’s just BEGINNING our friends; it’s just BEGINNING. What we would like you to do is this. When and if you own COVAD, when you are happy with the profits, please tell one or more of your friends about StocksAtBottom.com.
The War Goes Well
Osama Ben Laden is one of the walking dead, soon to be dead. The war on terrorism will go on for quite a while. America now possesses the only battle trained military force among the major world powers. Our fighter pilots have gotten more live experience in this war already, then they would if they spent ten more years in the military. Our special operations people have not gotten live experience like this in a generation. You can’t replace that kind of momentum. You can’t create it any other way then through war. The "Plans and Preparedness" unit at the Pentagon is working around the clock for the potential invasion of Iraq. We would be surprised if the President fails to use his momentum to destroy the dictatorship of Iraq, and send one hell of a message to Syria, Iran, and other Mid Eastern countries, don’t screw with America. The Philippines may come first, to send out a message that we are not targeting strictly Mid East countries.
As a country we must prepare for more attacks. This individual flying on the American Airlines jet from Paris to Miami over the weekend, which was forced to land in Boston, is an example of more to come. He had C-4 on him, which is referred to as plastique. It is an extremely powerful explosive that would have clearly killed all aboard had he had the opportunity to ignite it. He was seconds away from killing himself and everyone on board. It’s not over, and there’s more coming. You as an investor must not be on margin. If we lose two or three planes, air traffic will come to an immediate halt in this country. The Stock markets will trade down thousands of points and those on margin will be margined out. It will be a buying opportunity in the end, but there will be financial destruction in the market place somewhat similar to the September 11th attacks. Keep this in mind.
What will 2002 be like?
In a nutshell, we think fabulous. Here’s why:
After the September 11th attacks, this market made a –V- bottom
The Consumer Confidence indices are showing a marked increase. Look at the University of Michigan surveys Jobless claims have come down.
We believe earnings per share will surprise on the upside The consumer for a year has been refinancing his home at lower rates, thus he’s creating massive liquidity.
The FED has done its job
The President has done his job
The Congress has done what the Congress has done, which is what the Congress has always done. Why would anyone take a job like that.
We see America and the Stock Market has having a great 2002. It’s going to be a BRIGHT future.
Merry Christmas and Happy New Year from All of us, to all of you.
StocksAtBottom.com
Sorry about that.
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