|
elvisdoc, Sorry about being late in the reply. Posts subsequent to yours have done a good job answering some of your questions. About the only one I might address is incentives to buy SFE at present. Since valuation is truly open to debate, and regardless if SFE is fully valued, it doesn't address future performance. Certainly this decade, stocks that appear to be over-valued by many criteria have outperformed those with better valuation. Part of the reason is that the market is more efficiently pricing in future prospects and willing to pay up for companies deemed special, or dominant. [MSFT, CSCO, TLAB, INTC, AOL]. Even though others are entering the field where SFE competes, SFE has proven management with vision, a pretty unique business model, and access to resources both $capital and human capital. Also somewhat unique is there long standing demonstrated desire to help shareholders by rights, now IPOs and by being especially conscious of SFEs stock price and working their hardest to enhance it. They really do care about the little guy. Their goal is 30% IRR per year, they have been able to achieve that. I suspect that whether one pays $54, $64, or $74 now, in five years it won't make a lot of difference, just as 6 years ago, it made little difference whether one bought SFE at the low of $2 or the high of $3. Nothing is sure in the market obviously, but I think many investors would be well served by putting away a position in SFE, and not be tempted to take short term profits. Over the years, by participating in rights, IPOs, or the mutual fund and holding, the compounding will result in a substantial accumulation of wealth. The momentum of what SFE has going now, pales compared to even two or three years ago. The price is of course higher, but not out of line given the future potential. One of the tougher aspects in owning SFE is to wait out those sometime long periods where SFE is in a frustrating trading range after making a huge [and probably excessive run-up]. Eventually though, the fundamentals catch up, and then it goes on another tear making up for all that patience. Nothing wrong with trading the volatility, but only with shares not in the core long term holding part of ones portfolio. Short term trading is expensive, time consuming, and over time, tough [but not impossible] to beat what SFE will deliver with compounding and no trading tax bites through buy and hold. Mike |
