Neil, you bring up several thoughtful questions. I'm certainly not a market guru but here's my 2 cents worth:
First, we are now in a fairly trend less overall market and it will probably remain so until after the elections. After all, despite the July sell off, most investors have had a pretty good year and will be looking to book profits by year end. Also, because of the July sell off, those still holding losing positions will be looking to sell into any rallies for tax reasons. Tax selling normally occurs during Oct.-Nov. but seems to arrive earlier and earlier every year as investors race to be the first out the door.
For traders, a trend less market is difficult to make money in and full of dangers. Usually only the brokers make money here, while a position trader should go on vacation. For long term investors, it should just be a yawn. Unfortunately, it seldom works out that way as the majority of us folks aren't blessed with the psychological discipline to play the market smart. We have an itch for "action" that we just can't seem to stop scratching, when we should really just stand aside.
I would guess that the answer to your question about the percentage of investors who faithfully practice BUY & HOLD can be found in Bell Curve Theory, so roughly 2%. But even if these investors were more numerous, they alone couldn't move IOMG stock back up.
IOMG Bulls and Bears are stuck in trench warfare. With the hype bubble having been popped for now, only the continuous improvement in IOMGs business fundamentals will break the stalemate on the upside. Unless the PC vendors sales of Zip-equipped computers flop, I would guess next Spring could see IOMG back in the 30-40 range, providing they can refrain from splitting or issuing more stock. If the possibility of that kind of return doesn't excite you, then better to look elsewhere.
Generally, most long-term investors should be quite happy with a stock that returns 15% a year, doubling their investment in 5 years. IOMG is chock full of high risks, but if they manage to succeed with their business plan and competing technology doesn't leapfrog them, investment returns will be bountiful to say the least.
I hope you don't make the most common investment mistake of betting your whole wad on this pony. My measly 400 long shares represents only 3% of my stock portfolio. If I'm wrong, at least I get the chance to play another day!
Good Luck! |
