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Dan,

The problem with companies that have real revenues and real management, but simply sky high expectations and valuations, is that it often takes a while for the market to reach the same conclusion that our "jenius" minds have reached already. Witness RHAT as an example, it was crazy overvalued, but only until Oracle stepped into the game, and it missed earnings did the stock plummet.

The CAPS players that shorts these types of stocks has to be a little more patient, and have a little more conviction behind his thesis to obtain winning results. An added bonus is the fact that many of the crap companies are heavily picked to underperform, so shorting wildly overvalued brand names often allow you to pick up massive points on leaders (sometimes, not in all cases).

I think the best players rarely end loser picks because once it goes past -5, your accuracy has already taken the hit. The only risk beyond -5 points is the points, but there is always the chance that unless the story has changed materially, the stock will come back. Since points are somewhat easier to pick up than accuracy, many players leave the loser pick as active because the damage is done to the score, and the potential upside looks better.

Steve



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