Hi lifeisgood; Thanks for responding to my post suggesting that ADSP could go to $30 per share. Obviously, I underestimated considerably. And I got out way too early, but I still made money on it.
Was it really necessary to say: "With all due respect, you have much to learn if you are going to keep your capital." It seems to me that this is suggesting that I am unaware of how to trade. Actually, I'm kind of careful with my capital, in fact, perhaps, too careful.
You also wrote: I hope you use better reasoning when you invest your own money. In fact, it looks like I used very good reasoning while investing my own money. Do I think that ADSP is a great bargain at nearly $50 per share? No! My feelings for the long term future of this company's revenue and earnings has nothing to do with the retail hysteria and short squeezing that I suspected would happen.
All I gave were simple measures to estimate about how high the herd could drive this stock. Of course it is a bad idea for a stock (in my opinion), and of course the valuation is way out of line at $10, much less the current price. That doesn't have anything to do with what the stock price should be, which is determined by the decisions of huge numbers of traders. As far as the true value of the company, it is doubtless much, much less than the current price. But it is prices we are concerned with here, not values.
The fact of trading is that we shouldn't buy and sell things based on what they are worth, at least in the short term. In fact it is not even enough to trade based on what we think other people will think they are worth. Instead, we have to trade based on the trading decisions made by other people. Logic doesn't apply very much to the whole thing.
Of course, if we want to keep our capital, we need to remember the 2% risk figure. Don't overtrade, the stock market is a lousy get rich quick scheme, but a good long term vehicle for earning a living. Buckle up. Trade safely.
-- Carl |
