Thanks for the response. As I said, I wasn't trying to slam you in your own house etc. I concured that you have made some great calls and I DO believe you are one of the best on SI.
My main gripe was your earlier post poking fun at short players and especially MU short players. I, like you, tend to not short stocks but play the puts instead. I agree that those that short for years on principle are missing the boat but well timed put plays on MU are in my opinion more profitable than longs in Micron due to fundamentals and a good chart allows the timing when the mania finally dies. Riding MU up last year as it climbed from 20 to 80 over a course of many months made some people money but starting to leg into puts around 70 all the way up for the quick drop back to 30 made a LOT of money in a month.
Many semi companies are great plays I agree. I am not a perma bear however I am not a perma bull either. The majority of stocks in this market right now are well below their highs of the last few years. Only the indexes are consistantly higher due to the way the indexes are weighted and losers are dropped out in favor of the "new mania on the block". I have been playing calls for the last week so I do trade the long side plenty but I do think that inflation is a real concern for the short to mid term until the Y2K affect slows things down later this year. There is ample evidence that technology expenses are slowing as companies hunker down trying to avoid law suits etc. Until this shows itself in slowed spending later in the year, higher oil prices and commodity prices will show in the August and Sept PPI and CPI reports that will be released in Sept and Oct. I realize that this is irrelevant right now but wanted to address your paragraph that inflation concerns are for naught. I like to be ahead of the game <g>
As to my "aka" name, I address that at my personal website but it is not to avoid people from knowing who I am, it was a weak attempt at humor since I am a "third" (3rd person to have the same name in my family) and my initials are LLL thus I often intial everything at work with L3 and since SI wanted a longer nickname when I first signed up, I went with that.
Again, I have respect for anyone on SI that sticks their neck out and puts their targets out for public scrutiny and especially those that do so based on either technical and/or fundamental analysis as opposed to the hypster threads. You have a great "little corner". I only question slamming all bears or those that pick a certain company to bet against on a regular basis when there are often good reasons for doing so. Just because we short or put a company doesn't mean we always have a position on against them and just because the stock gets hyped doesn't mean that the company isn't a farce. You are experienced enough in this market to know that there are many great companies that have real earnings and revenue growth that are as of yet "undiscovered" and trading at PE levels that are real bargains but since the street hasn't found them in force yet, the stock price doesn't climb. On the other hand, there are numerous companies that are trading at ridiculous multiples that will never make money or at least never earn enough to justify their current stock prices. That is why there are so many different ways of trading/investing. Warren Buffet buys extremely low and waits years for others to "discover" his bargains. Others, buy a bit higher trying to time a move within a few months, I like to swing trade riding short term waves, and many day trade discarding fundamentals totally and just ride the daily Momentum using chart patterns or by reading the tape. ALL make money if on the right side.
Short term traders like us can scalp gains from these fundamentally poor stocks riding the Mo Mo train but in-experienced investors may misinterpret and get hurt trying to hold once reality sets in. On the other hand, when one of the dogs is in your back yard, it is hard to go long knowing first hand the real story behind the stock so it is easier to wait for the mania to end then play the drop.
Bulls make money, Bears make money but pigs get slaughtered. It takes both sides to make a market and I agree bulls had the easier go of it the last few years. I do feel though that we are getting close to the end of the bull in relative terms. I personally figure we have about 3 years left and it could have ended a few months ago or last year depending on what you use as a gauge. It is always tough to gauge especially when the rules change as to how to measure things. As I said, the majority of stocks are lower than they were last year in April despite the major indexes being much higher. Will it be an extended bear or a mini bear who knows? I really don't expect a total melt down either.
My main home here on SI is the MDA thread and despite what many think, we are not bears. Most of us play longs more than shorts however we also keep a guarded eye on the market and post the underlying problems that are lurking within it. We play the long side but watch what might upset our positions and are often right but way ahead of the rest of the market so we have plenty of time to switch sides.
I know of the ones from other threads you speak of proclaiming gloom and doom and 9K drops on the DOW due tomorrow but some of them are tongue in cheek, others are fundamentally correct but don't understand liquidity and how markets often explode up before they implode. I personally don't expect the US market to EVER implode but instead believe it will eventually either just go flat or slowly grind downward for an extended period until PE ratios finally return to historic levels. This has already happened on many of the stocks I follow and think this may actually BE the correction. I personally believe we are returning to more realistic levels one sector at a time and started doing so last June-July. Note many IT and software companies are now trading at 1/3 the PE ratios they traded at last April, then Drug and Biotech stocks got hit, Banks are getting hurt a bit now etc etc. A few years from now, the average ratio may be back in check,
I could write a novel as to why the new paradigm won't reap all the rewards that many expect but I could also write an equally long book on why there will still be great benefits from technology and why it will help keep inflation under check longer than most think possible. Inflation is growing faster than I beleieve the Fed wants it to however, productivity gains are also higher than expected so we may be OK in the market anyway. I love the market because it is a balancing act of world events, macro economics and emotion. World events are momentary, Macro events require constant study to gauge importance and emotion shows in chart patterns. Studying and tracking all these allows for an interesting hobby while taking advantage of it can make it a profitable one.
Well I wrote a lot more than I wanted to so I will wrap it up. I wish you the best of luck and will stop bugging you and go back to lurk mode. I hope I did at least open some eyes though that just because a person posts a dislike for a company does not mean they are always short, nor does posting that there are problems in the market internals or money flow also doesn't mean that they are necessarily short either. It is like my post when I was trading Thursday or posts you make here frequently. We often post that if a level holds play this way, if a level breaks go the other way. I feel that only looking in one direction tends to get one hit in the back of the head while seeing both sides allows the flexibility to react to changing conditions. I have a few favorite stocks that to be honest, I don't know if they are good or bad fundamentally. All I know is they follow my chart lines very well. I play the same stock long and short using options and switch sides of the table about every 3 days on average. I can also say that despite the fact that their charts go up at a 30-45 degree angle, I make more money on puts than I do on calls playing the same issue. Again, bulls, bears, pigs. <ggg>
Good Luck and thanks for letting me borrow some of your corner.
Lee |
