Torotrak thread....

Dear kippermewithaslapper I am sorry not to have replied to your post earlier. Simply, I have not had the opportunity to ride in a vehicle with an infinately variable transmission, nor do I know anyone who has and I don't know whether the gearboxes work. I do however, read the RNS data from those companies in which I have invested money and where possible the professional press concerning those companies. The company literature is positive that the system works - and if a false market has been operating in the shares, then lengthy prison sentences after successsful prosecution would be the penalty for the directors and quite possibly the sponsors of the floatation.

This is a speculative security, nothing more, nothing less. I have reduced my holding in the company, but I do hold a substantial (as far as I am concerned) number in an ISA and a handful as part of a balanced portfolio in addition to my ISA.

I do not pretend that the company is anything other than speculative; I do not even believe that the company will start to see a return for its investors for a minimum 10 years......however, there is circumstancial conditions that are conspiring to the overall succes that the company COULD have in times future.

Before I expand on this tack, let me also note that the motor industry likes change, but on their terms. At the moment, I am not convinced that TRK will succeed because the marketing of the product and publicity is terrible.

Let us look at the circumstantial evidence for a moment. In USA there is a huge demand for SUV which are hopelessly inefficient in their use of fuel and there is a fuel ecomony standard that is in the process of being agreed upon. RNS statement (I recall) was made that in independant test the gearbox gave a 20%+ improvement to fuel economy. American drivers like autogearboxes. In lux vehicles, smooth delivery of power is very sought after - this is common throughout europe as well as US.

I don't know if you have ever been on a farm, but tractors ocassionally have extra wheels attached to the rear wheel where they are ploughing (or other work) in very thick mud for traction. The application of too much power in such circumstances can spell disaster for driver and vehicle - the use of a computer to deliver power has to be a safety issue, surely? Next we are seeing increasing use of technology for the sophisticated management of traffic. This is a part of a step towards "drive by wire". Consider that with the use of telephony, only those vehicles equipped with the latest technology will be able to travel on motorways, perhaps - so that the ride, speed etc is taken completely out of the drivers control and managed by computers. This could mean that cars travel very close together on motorways at higher speeds etc.

Computers can establish those vehicles that are taxed, have insurance and are roadworthy for example - I know that this smacks of big brother and is hideous, but it is technology at work.....

These are some of the reasons that I feel that TRK is in the right place at the right time.

The company has not looked (as far as I can tell) at the tiny car makers to get some of the specialist vehicles fitted with gearboxes - I am thinking of marques such as TVR, Bristol and some of the kit car makers - what about the london cabbie and the gmileage that they put on?

Last, there have been many instances where companies have produced everlasting lightbulbs and razor blades that never blunt - you know what happens - yep, they get their patents bought and you never hear of them again - except when the acquiring company re-launches the product as a remarkable achievement in the house colours etc.

So what do I think will happen to TRK - in the short term the share price will continue to drift lower - it will only rise IF the company announces that a manufacturing or production deal is secured or if the company is taken over.

I believe that I have acquired sufficient shares at a price where I will be able to benefit from either scenario. If there is a manufacturing agreement, then I would expect to see an immediate rise in the share price to 600p and if a takeover is announced, the share price to double from its present level.

I do not expect the latter to happen unless there is no announcement of a manufacturing agreement during 2002.

On a personal note, slap.... I applaud your questioning holders decision to hold shares but it can be rather tiresome when there is niggling negative which are not terribly persuasive.

Do you own any shares in TRK? If you do not, why bother to depress the spirit of those that do? If you have sold short shares in this security, then I believe that you are particularly brave - it is usually a very clever investor that is successful at short selling - you might be just such a person.

Short sellers generally research their chosen instruments very much more thoroughly than those holdong long - they have to because a substantial change in the company could be catastrophic for the short investor.

I have tried to give as full an answer as I can - I am not an engineer but am very positive for the long term reward that I shall enjoy.

EJ (Trog)