Shyam, there is a rule on Wall Street that has been in existence longer than God. The rule is repeated over and over again because it protects the investor who abides by it. The people in this forum are very intelligent and I'm sure they've heard this saying ad nauseum: "cut your losses short" is one half of this infamous rule.
I have been long on Iomega for a long time(up until this month. Now I'm all in cash) and like the company very much, but in this jittery environment, where even positive earnings announcements still drags a stock down, you must be very careful of your paper losses. In a bear or correcting market, all stocks, good or bad, are dragged down.
The name of the game is to establish a cut off point for your losses so that you live to play another day. I was probably the bullish of the bulls in Iomega just a couple of months ago, but you cannot argue with the market, which is made up of many investors, professionals and amateurs, who vote with their money every day. Just look at the chart of Iomega. It is signaling something more than just a correction.
I don't know if Iomega's stock price will ever return to its former glory because of the lack if institutional sponsorship and the current market environment. It may take a few months or a few years. Meanwhile, if you hang on to your paper losses, you could have 'dead money' in this stock for some time.
By the way, for those of you familiar with the prominent market timer Elaine Garzarelli, she issued an all out sell signal for U.S. equities, via fax to her subscribers today. She said her indicators have turned negative and she expects to be all in cash for the next 3-9 months. You should not wholeheartedly take the advice of any one market guru. I am only providing this as another piece of info to aid us smaller investors.
rick |
