Market Timing
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Market Timing
October 29, 1998
Market Timing
Table of Contents
1. Market Commentary
2. USDI - a player in the IRIDIUM Satellite project
3. NLAB update
4. Departments
1. MARKET COMMENTARY
As predicted in our last issue the US equity markets have
stabilized and begun to head higher again.
Asian markets have had a nice rebound and some currencies
have begun to strengthen against the US dollar. Hong Kong
continues to show some weakness, but these problems can
probably be traced back to the actions of the Chinese
government in Beijing.
During the last week European markets have also begun to
move higher once again. Against this backdrop and more
importantly to our subscribers, there is a groundswell
of interest and commentary developing in and about the
"small cap" sector of the market. The Russell 2000 small
cap index has moved from a low of 303.87 in the first week
of October/98 to close on October 23/98 at 367.05. This
is an increase of over 17% in 2 weeks.
We believe the market is entering a phase where interest
will begin to increase in this long neglected sector of
the market. There are excellent investment grade and
speculative opportunities in this area, which have long
been overlooked by the institutional money managers with
their fixation on the Dow 30 stocks. The DOW is now
beginning to look, if not a little tired, at least fully
valued. The fund managers are now going to have to go
to work and find new areas in which to deploy their
client's money.
Leverage is a bad word on Wall Street these days and without
leverage these managers are stuck with relatively low returns
in the bond and money markets (under 5% on 30 year US treasury
bills). It is our feeling this will result in more money flowing
into the smaller cap sector of the market - and remember - with
the huge amount of money now in mutual funds and the market in
general, it only takes a relatively small reallocation of assets
by market participants, to have a substantial impact on the
price of these smaller company's shares.
2. US DIGITAL COMMUNICATIONS INC. (USDI)
We are profiling a new company in this issue of MT:
US Digital Communications Inc.
Symbol: USDI Trades: OTC BB
USDI is a proxy for one of the biggest events in the
evolution of wirelesses communications the IRIDIUM
Global Communications System. USDI in conjunction
with its subsidiaries SKYSITE (http://www.skysite.com),
INSAT and PROJECT 77 (http://www.project77.com), is a
supplier of both the Motorola and Kyocera telephones
and pagers and a resellers of air time for the IRIDIUM
network. As such, expect to see their revenues and
profits grow in lock step with the growth of the overall
satellite network.
The IRIDIUM satellite phone system consists of 66 low-level
satellites, which completely cover every point of the planet.
This $5 billion dollar investment allows any point or
individual on earth to access telephone, data transfer
or paging service.
The 19 members of this consortium, which has been
spearheaded by Motorola, include some of the largest
telecom companies in the world, as well as a number of
very large Middle Eastern, Asian and South American
private investment companies. The financial commitment
is very large and IRIDIUM (http://www.iridium.com) will
go into service November 1, 1998. The "start" date for
IRIDIUM service is one of the reasons that we are bringing
this company to your attention now.
As you can see if you look at a chart of the stock
(http://www.bigcharts.com) the USDI's share price peaked
at $7.00 in early July of this year, in what we believe
was anticipation of the original service commencement date
of September 23, 1998. When it became obvious this date
was going to be pushed back to November 1, momentum was
lost by the stock. It then bottomed out on October 8 at
$2.30. In the last week it has moved back to close on Friday
(Oct 23) at $3.93 up 7/8s of a point or 28.5% for the day
on 366,200 shares traded! See the October 23 USDI News
Release at:
http://biz.yahoo.com/prnews/981023/dc_fcc_us__1.html
The IRIDIUM name will be on a lot of peoples "radar"
screens soon as a $100 million public relations, marketing
and advertising program will help launch this service.
This is definitely a "timing" and "momentum" play and
there is no doubt that the very wealthy and smart companies
and individuals that are part of the IRIDIUM consortium are
going to work hard to make this THE wireless network of
the future.
Given the momentum that is building in the stock, USDI
could easily see its old high of $7.00 between now and
shortly after startup of the IRIDIUM service in the next
week. Depending on a stable market and some positive news,
which we fully expect, and given the sophistication of the
underwriters and companies behind the IRIDIUM project, USDI
prices above $10 are quite possible over the next 90 days.
4. NUONCOLOGY LABS UPDATE
NuOncology Labs Inc. (NLAB - OTC BB) continues to make
progress on its business plan and have announced the opening
of their new offices, predictive oncology testing and
research building in Houston TX. (See October 15th News
Release at: http://biz.yahoo.com/n/n/nlab.html). This new
facility is capable of performing testing to the rate of
1000 comprehensive predictive profiles per month.
MT heard NuOncology is planning a road show in Europe
that will include NLAB management starting early in
November. These "show and tell" meetings are intended
to attract additional funding, market sponsorship as
well as institutional and broker interest for NLAB.
We expect soon after this trip there will be further
word on the Arglabin/FTI issue by way of publication
of their research in a recognized medical journal.
In addition there will be more results coming on the
second large sample of patients who have been undergoing
treatment for various types of cancer with Arglabin.
The share price has fallen on relatively small volume and
somewhat tracks the skittish market we have had for the last
2 months. It would not be inconceivable that this market
rebounds right back to the $6.50 range in a day or two of
trading - especially if there is some further news on the
use of Arglabin as a successful cancer therapy.
REMEMBER this is not a theoretical concept NLAB is working
on - people ARE BEING TREATED with ARGLABIN today and their
CANCERS ARE IN REMISSIOIN. This company has the potential
to be a $500 million - $1 Billion cap company and we believe
you will begin to see some recognition of this in the
marketplace BEFORE THE END OF NOVEMBER. For a current
quote on NLAB please go to:
http://quote.yahoo.com/q?s=nlab&d=d1
DEPARTMENTS
A. Stock Quotes
B. How to Unsubscribe to MT
C. Disclaimer
A. STOCK QUOTES
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