Gottfried, I understand your point of view. Peter Lynch says in his book that when someone says a stock is the next ... whatever, just run as fast as you can in the other direction. So, the "AMAT of fiber optics" statement is probably a negative for the stock. I mentioned this mainly to try to get some attention from the folks here. However, look at the numbers with this one. It looks cheap relative to AMAT, plus I am sort of focused on being a contrarian here. Everybody likes AMAT here, but hardly anybody likes fiber optics. However, there is a good argument that fiber optics is going to be a huge growth area going forward. So, I am going against the crowd, or so I think anyway. One could argue that AMAT is so well respected, large in market cap, and pricey at this point that the stock will not do as well going forward. I really think the contrarian approach is the way to make great gains in the market. The trouble though is if you get it wrong you can get hammered. Buying dotcoms here would be a sure way to do just that, for example. In general I think solid companies are the way to go, which generally means larger and more established companies. But at what seems to be great prices, I will tend to venture into the more risky plays. AMAT is still my largest holding, by the way, but I am considering doing some trading around my position. I noticed AD just shorted it at 55 and change a few minutes ago.
One last thing about Peter Lynch. I think his rules are sometimes a bit too simple. I sold my XLNX a few years back perhaps partly of something from his book that stuck in my head. He said avoid stocks that start with X, the logic being that they are probably overpriced, due to people wanting to own the next Xerox, or something like that. That was just a small part of my decision, another being when they came out with that hamburger-stand annual report (you would have had to see it to understand, it is the one that also came with the magnifying glass). Selling XLNX was a big mistake, but I am back in ALTR now.
Hope this response is not too long. I can type fast, that plus caffeine is sometimes a factor.
Regards,
John |
