My motivation in buying a stock is owning a little piece of the company. If the price soars, then I'd look at it again real carefully- is it speculation (thus, sell to the lemmings), or is the company actually worth more? Or, has the company finally been noticed? I wouldn't necessarily sell a company just 'cause it went from undervalued to fairly valued.
In any case, I fully realize that when you buy stock, you're buying part of a company. That's why I'm not a fan of technical analysis (nor its close relative, the Psychic Friends Network). That's why I tend to avoid stocks I know little about- I can look at TXN and see all sorts of good things in the future, but when I think of Winnebago or Kmart, I just see clunky RV's and dirty pretzel-and-slushee counters. They may be good companies now, but I realize my own limitations- I'm quite ignorant once I leave the semis, and ignorance is a very expensive flaw. Besides, there are still some great undervalued stocks in the semis. TXN happens to be one of the least liked semi stocks, but they've got a lot goin' for 'em. Believe it or not, I apply a Buffett-type approach to the semis, and I'm confident that it will reward me handsomely.
Brandon |
