LWI- monthly update – panic in Cyberland?

Our calculated WSE-Index dropped 12.7% since 18th July 07. Is the correction phase not yet outstanded or is this development just a period of finding a healthy evaluation level in order to become bullish again?

Our index doesn’t use weighted market capitalization because of missing free float. Unfortunately, but with the criteria below we believe to have selection criteria which are rather adapted to the situation and reflects the market quite good enough:

(1) Market cap (> 1.5 million $L)
(2) Free float (> 20%)
(3) Market presence (since three month on the board)
(4) performance till now (weighted, dividend included = positive)
(5) Business idea
(6) Management skill, communication
(7) Economic branch the company is active in

The index considers the following titles:

AMS – technology, gaming
BOB – technology
DDE - real estate, design
ETC - real estate, environment
HCL - stock exchange
HOT - real estate
KJL - real state
LEM - investment banking
LGO – technology
LLL - real estate
MDC – investment banking
PNK – services, marketing/design
RDX – technology
RIS – services
SLM - services, marketing
THI – real estate, technology
TMA – technology, distribution
VGI – technology, gaming

A drop of 12.7% (compare with http://slquotes.com/lemur) within one month is not a lot if we consider the volatility of the market and we all know that different events influenced the market during this period, starting with the new gambling politicy of LL, all the primary and secondary effect on the banking systems and panic sells. However, LL still exists and if governments start to think about developing laws for the cyber world it will only help LL/SL in the long run. The economic data of SL haven’t significantly decreased till now either.

We are also quite optimistic about WSE. That they listed HCB is surely an important action and if their campaign will function and 300’000 WIC’s will flow in the stock exchange we will only see one tendency which is up.

Outlook? Probably we will reduce the index down to 15 titles during the next 4 weeks. A first test will already be the merger of DDE with KJL where we have to rethink our strategy. 15 titles is the minimum we need to reflect SL-economy as close as possible. Some shares still suffer dumping actions as it is the case for HCL. However, we judge that the index will recover over the next four weeks to turn into positive again and then hopefully nothing will hold him back any more..

Greetz
Casper Trebuchet
LEM, CEO

House of derivatives (LFB, LWI, LHH)
http://lemurinvest.blogspot.com