I have no disagreement with your comments about short sellers. Many of us remember the brutality of the short attack that apparently occurred last spring, taking the stock down to the 50% level you, and other long investors, abhor. Your comments about the gut-wrenching experience of watching your investment get cut in half was born out by the posts made on this thread prior to April. Who can forget Sparky's dramatic turn-around from capitulation and defeat, at the bottom, to confidence and a willingness to remain fully invested?
I know from private e-mail, and discussions with fellow investors, that your concerns are wide-spread. When should an investor take substantial profits off the table? Why take the chance that for any of a zillion reasons WIND might tank? What should the rational investor do? A while ago on this thread I was asked about how, in hindsight, the long-term investor might have handled Iomega when it shot thru the roof only to collapse to a more realistic price.
There are volumes to say on this subject, and someday it might be fun to take time to examine these issues similarly to how we delved into pricing and asset allocation theories. Maybe when I return. (Just a hint: Buffett is able to follow successfully a static buy-and-hold strategy because he avoids high-tech, particularly small high-tech companies. You are right in implying that the long-term high-tech investor sometimes is compelled to sell stock he/she likes. The trick is to establish logical conditions that dictate a sale - and, like Peter Lynch says, the conditions have little to do with the stock price going up, up, up. However, the conditions differ from Peter's becuase they appy to companies you continue to like.)
Allen |
