Malloy,
I thought you would like this -
I know many of you are getting home or sitting home wondering what the hell happened to the big Q today. I know I have mentioned this on several occasions but I will continue to drive it home.
It is my opinion that until the average Q holder can understand AMBIGUITY, he or she will always fall prey to it's inherent machinations and the fear that goes with it. As I have also stated, Ambiguity can cost us at certain junctures in the immediate sense but long term it will make us a fortune.
What is ambiguity as it pertains to a stock like Qcom? Essentially it is a lack of understanding on the part of the average investment entity, whether that be a lesser House, fund or individual as to exactly what Qcom is, has and the application of such in it's appropriate sector. Although injurious to our account from time to time, this ambiguity is to be expected but more importantly, it must be understood.
If Qcom is of an ambiguous nature, what stock would be considered just the opposite, you got it, INTC, and guess what happened in the market today, INTC was up about 12 with no wavering and our beloved Q rose, wavered, toppled and fell, much to the bewilderment of many but not to me after thinking about it.
What makes the Q so ambiguous? Well you take a stock that was around $20 a share about 12 months ago and it appreciates over 1,000 percent and is called Callcom by one high profile news analyst, considered an internet stock even by CNBC hosts and Q.com by others, and on top of that try and tell the aforementioned group about Code Multiple Digital Access and well, you get the picture. So how is this good or bad?
It is good in the sense that those in the know have many fantastic buying opportunities from time to time as a result of the lack of understanding on the part of ignorant investors giving up on their shares on a day like today.
It is also good that ambiguity sucks in the short sellers who will eventually have to come up with shares in a very frantic manner thus sending the stock skyward, such as the shorting that obviously took place today. It is also good in that when announcements are made by the company that you understand well and that are ambiguous to others, the stock price zooms skyward. Ironically it is these shockingly good announcements that grow more and more frequent that eventually strips away the ambiguity the stock now has but by then our fortunes will have been made and should with Qcom be continuous.
Now how about todays action. Yep, that would be considered bad. Those not in the know and feeling they were holding on to a stock that might be no better than the average internet stock probably sold. the shorts with all of their infinite wisdom sold to make their fortune, but the big thing and this I have seen time and time again, the large Houses and MM's know the company and they are very much aware of the earnings report and it's impact. With no upward pressure and the two intervening variables I mentioned earlier, they were licking their chops by taking out the stops and picking up shares. Remember, one of the responsibilities of the MM's is to make a profit for the firms like Goldman and Merrill etc. Another bad about ambiguity is you are laughed at should you recommend Qcom and state that it should go to $1,000 a share. After all, it is not economically or Econ 101 correct to say you agree with the fool that made that recommendation, therefore we have basically seen no more dramatic upgrades since. This should change with what? The stripping away of more ambiguity come earnings day and then the analyst can stand up and recommend Qcom.com. You see, we will still not be there, but they are trying their best.
So, that is all that occurred today and will from time to time in the future. The key here is to do what I have been doing and laughing the whole time, buy on what I call, these AMBIGUITY DIPS.
Selah,
V |
