"As of the close today, I'm up 69.15%. I'm gonna retire before you if you're not careful."
Wanna bet? You've got a .615 bagger. I've got 8.5 bags from JDSU with profits taken on the ride up; and, I've still got a healthy portion of my portfolio in the company. And, this is my point: Anyone who is so complacent to think that this, or any stock, just cannot go south in a spectacular way is complacent. To the previous poster: how will Cisco perform in a bear market? But, if one purchases when the stock price is "on sale" one can sleep like a baby because one is protected on the downside.
Here is a market truism: the high priced stocks--and by ANY standards, JDSU qualifies in spades; even in this late-stage market driven by an increaslingly smaller number of leaders--become more and more vulnerable to disappointments. The high p/e stocks HAVE to keep putting out extremely high growth. If they do not, they get spanked really hard. Look at Dell last fall. Earnings growth came in at 38% and that was a few points below expectations. The Dell price got clipped, hard. (Sure, it is a different industry yada, yada, and all. But, the point is the same: unmet high expectations lead to hard falls in stock prices, more often than not.)
If one is patient and careful to not chase a stock up--remember this is my investment approach talking here--one simply does not have to fret when the market retraces in a correction or a real bear market.
(BTW, let me know when you come to the Big Island. We should have coffee.)
Ciao,
David Todtman |
