The Chart du Jour

Irwin Jacobs: Be Quiet

May 15, 2001

By, Barclay T. Leib

We did not see the advertisement in Tuesday's Wall Street Journal, but we read about it: financier Irwin Jacobs, a major Conseco stockholder, bemoaning short sellers on Conseco stock, and suggesting people should be fair and let this previously shell-shocked stock up for air.

So what if Conseco owes just a bit too much debt. After all, Chase and BofA let them off the hook last October -- at least for now. And maybe the former GE whiz kid now heading this baby can really turn it around -- if given enough time.

But we for one, don't believe it. Where excess debt and leverage lurk in the current financial sector, bigger problems will invariably follow.

Indeed, lurred by some Fibonacci bands that fit pretty snuggly, and an impulsive 5-wave ascent, we remember with some chagrin thinking that Reliance might be able to turn themselves around last year. We were dead wrong. That stock instead made a "spike" run up above $7 and then collapsed to currently trade at 2 cents...181 years of venerable history within the insurance world down the toilet.

If Reliance holds any lesson for us today, it is don't get suckered into Conseco. Indeed, in the chart below, is it our imagination, but don't the two chart patterns bear a certain resemblance?

Chart produced using Advanced GET End-of-Day

We will let this "pattern match" speak for itself. Irwin Jacobs: be quiet.

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