The following is what someone posted on SI re: the Bulltrade Newsletter and its decision to short QCOM.
"November 5th comments resulting in a short position @ 276 3/4
QCOM -- Qualcomm had a surprisingly good quarter (even above our high expectations) and had a very positive outlook. We think Qualcomm is in prime position to capitalize on the wireless industry. But, we think the stock has come too far, too fast. The company cannot grow at the pace that it is priced for. It is currently at a forward P/E ratio of over 70 (since the forward year is the new year just started). The stock rose 10% in anticipation of
earnings and then rose another 25% as a result of the earnings and split announcement. From August 1993 to January 1999, the stock essentially stayed in a holding pattern. But since January, the stock has risen 1000%.
Comments from November 8th Newsletter: (Short postion at 8% loss)
QCOM -- We didn't expect that big of a continuation in the rally of QCOM shares, but we're not in the least bit worried. This stock has come way too far, way too fast. We'll see where things go Monday.
Comments from Nov 9th Newsletter:
QCOM -- Weak on a very positive day for the Nasdaq. Now, if we only had a really negative day, we'd see the bottom fall from under QCOM.
Comments from the Nov 11th Newsletter (Short position now at a 17% loss)
QCOM -- The momentum in Qualcomm continued Wednesday. It is
EXTREMELY overextended and may fall 10%-15% in one day if the market isbad. We have set a stop loss at $327, to limit our loss to just under 20%.
Comments from Nov 12th Newsletter (Short Position stopped out at 20% loss):
QCOM -- Stopped out at a 20% loss, but we're re-entering a short position Trading at nine times year 200 earnings is just ridiculous for a company only growing at less than half that rate, in an industry that will face severe
competition this coming year.
EMERGENCY MID DAY ALERT NEWSLETTER Nov 12th (I've never seen them do this before!):
This stock is out of control. It is most definitely a bad call on our part and we strongly suggest that you exit your position. This stock is set to fall, and fall big, but right now there is too much chaotic buying going into the stock. We STRONGLY feel that this stock will be down over 30% in the near term, but this position is too dangerous at this point in time.
Comments from November 15th Newsletter:
QCOM -- Wednesday and Thursday were two days of short covering, in which a lot of investors shorted near the close. Friday opened up strong because of a lot of pre-market activity, spooking all of the shorts and causing the stock to erupt. We are so bearish on QCOM at this point it is hard to explain. We made a poor call to short this stock the first time, as the tech sector was holding up too well in the face of an interest-rate hike threat. We felt
confident about the second time we shorted, and still do,
but we were a bit nervous Friday afternoon. We got an overwhelming amount of e-mail questioning the position. Apparently, every other newsletter out there is touting the stock which is what propped it up Friday. We feel that two things hold true about momentum. The best time to buy is when blood is on the street, and the best time to sell is when everyone is too happy. Right now every long investor of QCOM is elated. Now is the perfect time to short,
as the high side risk is not much more than $400, but the low side is $250.
We're not knocking the company's ability to perform, but some reality has to come to the minds of shareholders sooner than later. This stock is primed for some profit-taking before year's end. We think it'll come soon enough." |
