Is it? I bought the highly touted New Yooooooooooork Stock Exchange based Centennial on 2/10/97 $16.50, watched it halt trading on 2/11/97 (can I pick em?),and sold it on 2/21/97 for $2.25
I watched SIII drop 70 % in a little over 2 months(only had calls there).Look at WDC, ASND,QNTM, APM,PRST.
Yeah, the risk is different all right. If I have 1000 shares of a $50 stock and it goes up a point, I make $1000. If it goes down a point, I lose $1000. When it goes down 10 points, which is the norm for these tech prima donnas, I lose $10,000. I've committed $50,000 of risk to this investment.
When I buy 10,000 shares of a 25 cent stock, and they haul the CEO away in chains, I know I can't lose more than $2500. If it goes to $2.50 (and they certainly can), I can make $22,500. I like that risk/reward much better, especially if I've done my DD. I've committed $2,500 of risk to this investment.
And by the way, here's a contrarian theory. I think it's easier to do DD on a BB. Either there's no info(so you stay away) or if you find info, you know it's probably more complete since it's a smaller firm.
DD on a mid/large cap? All year we've seen stocks with 20 or more analysts,the pros, getting deceived.Companies mysteriously missing earnings, revenues estimates. How could so many be so wrong? Yeah, I'll trust my DD on the BB over the track record of the big boys.
TG |
