Yes, it's looking like it could be setting up for a bit of a fall, perhaps down to the 120-130 area. IMO there is little the management of AMZN and AOL (a fine surrogate for the net sector) could say (including throwing in a split) after merely meeting or barely exceeding earnings, which could please this ugly mood that's blown in for a few days (plus, the green-man is speaking, before which is many times taken as a window for the program traders to wheel out the sell programs). Both trading down after hours, there should be some heat on them, at least early in the session tomorrow. I don't think investors really have anything to worry about... I'm shorter-term oriented so I'm looking to lock in gains on a short-term swing down. If YHOO trades unexpectedly strong and I'm stopped out, I will re-assess and re-enter at the appropriate time; the stock's price action and the market internals tell me which direction and when.
Actually, I'm a bit of a YHOO bull too, I like the company (how can you dislike a CEO who's title is "Chief Yahoo", and their site/services are truly innovative/useful) they have proven to be a very creative, dominant new-age media content and service provider. And, they make a PROFIT, unlike AMZN.bomb (actually, I kind of like them too, but only on a short leash). IMHO those who believe stocks have to be valued ONLY by yesterday's fundamental-oriented earnings models (thus trading at a certain P/E), don't fully appreciate how stock prices are really set -- they are simply priced based upon raw supply and demand (the rationale for which can change) not based upon anyone's opinion of where the stock should be priced, according to "their" model. In other words, some stocks trade sort of on a "popularity contest" valuation, which is perfectly valid. P/E valuation methods have been preached by the academics as "the holy grail" for so many decades, they've become like a religion to some.
Per Cramer today (I'm in violent agreement) what makes me nervous about AMZN is their somewhat cavalier attitude/approach in talking to the street at earnings time (like again, today)...they lost (excuse me, invested) a lot of money this quarter and should be more serious about it and what is their plan. YHOO seems to be a much more crafty/shrewd bunch, with a better business plan and execution track record.
Regards, -Steve |
