Let's talk investment strategy for ASND.
When I started building a core position in Ascend in December I was
hoping for a turn around situation to develop. When Gary Korn reported
from the Morgan Stanley conference in January, I added to that core
position. I wasn't too surprised to see the stock above 30 before
the earnings release. However, when the earnings came in at .24 I
was as disappointed as Sector Investor. After the CC I decided that
the future was bright for Ascend.
If I was going to add to my core position I had to have a price target
in mind. A 6 month price target seemed feasible based on public
information. Hmmm, if I toss out the Buy Out, consider slow 1H,
factor in promised double digit sequential 2H, notice that a trashed
networking sector was due for a rally, add in the possible high
revenue growth from a new "killer product", ANALyst upgrades, I should
be able to set a reasonable price target for the July-August time
frame. Should it be 50 bucks?, naah, who would pay 50 for a company
that can't even beat their last years earnings per share for the
1st half of 1998. What about 35 bucks, gee that would assume no one
believes management's "double digit" prediction, Nope! Gee, how
about somewhere in between, maybe 42 1/2 by August? Yeah, that seems
about right. Ok 42 1/2 it is!
So how do I position myself in this stock? I have retirement accounts
and I have some margin accounts. Gee, I have been investing in these
tech stocks for 10 years, and I have always wanted to get in on a
turn around situation and ride it all the way. Look what happened
to Bay just last year. If I just trade the stock, I will probably
miss the big price move like I have with so many stocks in the past.
Then I'll feel that it's too risky to get back in at a higher price
and will move on to other investments. If I make one big bet for
the long term, I will be at the mercy of the market, analysts, asians,
saddam, you name it! That will drive me crazy.
Hmmm, since I am very confident in my price target for the summer and
just about everyone would agree that it's going to be a bumpy ride,
why not have the best of both worlds. I'll build a large core
position in my retirement accounts and I'll use the margin accounts
to trade this baby all the way up. Oh baby, yeah that's the ticket.
So, when the longs are moaning that the stock is down and their long
term investment isn't as good as TECHX I'll use that as a short
term indicator to BUY in my margin accounts. And when those TA guys
start screaming 50 or 60 bucks I'll sell. Hey, I'll be happy either
way, I'll make money coming and going as long as I have the trend
right. Oh yeah, I got it right this time. - GO ASND -
The End.
- Sure Thing -
PS
I was not a registered SI person when you formed the "Pick your
favorite stock to beat ASND", so I'll do it now. I picked ASND with
a catch. I'll use my confidence in ASND's upward trend to execute
leveraged buying in my margin account every time we have a pullback
which allows me to beat anything you post.
( Ok, flame away! ) |
