Greg, Stock Bull, and James,
I think you guys are being a bit too unfair to BB re: his call to sell ONTK. Let me preface this by saying that I am probably the last person to defend BB, based on his past broker-bashings, so I think my analysis of the situation is unbiased.
I am not personally familiar with ONTK, other than the fact that I know they are involved in chip making equipment and that they recently agreed to be bought out. If I understand the situation correctly, and please correct me if I'm wrong, but the way I understand it, you bot ONTK on Brinker's rec. After the merger was announced, apparently BB thought the basis for his investment theme in the stock was gone, since ONTK's stock would now trade in tandem with the acquiring company's stock, not on its own fundamentals. From what I have been able to decipher from the posts, you actually made a profit on ONTK. After the sell, ONTK rocketed to $47. Where's your beef? I don't get it. You made money, right? Who cares what the stock did afterwards. It could've just as easily went down, or the merger agreement could've fallen apart.
I've been a gaming stock analyst, besides my brokerage tasks, for the past 3 years. Lets say my favorite stock, XYZ Casinos, gets acquired by a hotel company like Marriott. Chances are, I'd probably drop coverage of XYZ, since I don't follow Marriott. That's just smart and prudent. From what I understood, BB did the same thing. He understood ONTK, but wasn't completely comfortable with the acquiring company. So instead of leading his listeners into waters that he hadn't charted, he just said "take your profits." The fact that the stock went up afterwards is immaterial.
You guys remind me of a client I had a few years ago. I bought a stock for him that went from $8 to $13 in less than a month. I just thought the stock had run its course, and sold it, thinking "50% in a month--no one's gonna complain with that." Stock ended up going to $20 about 6 mos later. One client calls me (6 mos later) and says verbatim, "Ya really sold me a bum steer on that one," referring to the stock we bot and sold with a 50% profit. I really didn't know what he was talking about, so I asked him what he meant. He started whining about it going to $20 after we sold. Reminds me of Brinker's experience with ONTK--some people really do think they should get in at the absolute bottom and get out at the absolute top--miss the top or the bottom by an eighth of a point and they're crying foul.
Just be happy you made money--look at the bright side, he could've told you to buy that Bre-X stock or some other pig that cratered.
Gary |
