Don, I like your contrarian viewpoints. Good for folks who are so positive on a stock to have a sounding board.
I think my response to your comments about outrageous valuations is that yes, these co's will get hit big time in a severe correction. But I also think rmbs would be one of the quickest to snap back, and would still outperform the market over the intermediate term (1-3 yrs in my book). I am in rmbs and will not attempt to use it to market-time. So my approach is to try to find stocks that will outperform the market (which I see as the SP500) over time, not necessarily always go straight up.
But please permit me to say that I think you are getting a bit melodramatic with comments like, "pump and dump." Say what you like about investment advisories; Hagar has lots of his own money in Rambus. I wonder if analyst Edelstone, who is bullish on RMBS, has any of his own money in RMBS?
If you think brokerage house analysts have nothing more to gain than a bonus, you are wrong. I'm sure you know, but are neglecting to state, that analysts can lose their high-paying jobs if they don't bring in enough underwriting revenues from companies to their firms. On the other hand, if they bring in a good amount of underwriting revenues, they get lots of money. So this is how companies like AMZN and PTEL can get analysts' "buy" recommedations. Even if the emperor has no clothes, the cardinal rule of the analysts' game is to pretend he does.
And if enough finance houses get a piece of the underwriting pie, then the doggie companies can get several major buy recs. The analyst game is a big one, and it is well-documented.
So let's lay off the bit about the analysts. If rmbs doesn't need big $ of bonds or stock secondaries any time soon, unlike amzn, then obviously the anlysts won't bother to cover it. BTW, do you have any idea why AMZN is doing so poorly even though all those big analysts have buys on it?
Victor |
