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Technology Stocks : RadiSys Corp
RSYS 1.720+0.6%Dec 11 4:00 PM EST

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To: SHGLaw who wrote (704)6/5/1997 1:17:00 PM
From: Czechsinthemail   of 1472
 
Jim

Lots of people share your sentiments about how insane short term price action in stocks can be. Two thoughts. First, you seem to have caught on, and you can use this information to advantage by buying strong companies when their stocks get tanked. Second, from a long term perspective, price will ultimately track the business and earnings performance of the company. So if you have the patience to wait, reality will sooner or later get prices to fairly valued or even overvalued levels (it cuts both ways). The problem is that emotionally it is hard to buy when the price drops and hard to wait for it to recover. Buying when the price drops feels like buying into unseen bad news and holding on feels like you are waiting for a nonevent. The problem is that we want the market to confirm our opinion right away, and if you are buying because you feel the market is undervaluing a company, there is a good chance that it may continue to do so--at least for awhile.
I think RSYS is such a fundamentally good company that holding on will be very rewarding. As it is, you don't have to pony up a high PE to get excellent growth. The fact that it has been underappreciated by the market gives you the chance to buy more and celebrate when people catch on and the price takes off.

Baird
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