FWIW,
I like to think that I exercise some measure of discipline with BRCM. Jubak writes a very eloquent piece. His objectives are simply different for his stock and 12-18 month holding period.
My BRCM stock is more along the lines of a decade+ holder for me. Jubak talks about a 23% pull back in BRCM, I hope no one believes that there would not be a 20%+ pull back at some point. That is the nature of high tech, even the broader averages get whacked by 10% or more every year, sometimes on multiple occassions. Should I be alarmed by what is normal? what is expected? The temperature is lower in winter. The tides on the ocean move back and forth. These are but simple cycles, they are what they are.
I do have trouble with his math and how everything must work. One sells BRCM expecting a 23% drop. If you have held BRCM for a year or more and sell Uncle Sam is going to take 20%. So a 3% profit at best? Now, I like LSI myself and may even pick some up. He expects BRCM to advance 30% from current levels and LSI to advance 40% from current levels. A stunning push me back in my seat difference of 10%? Okay, advantage LSI...Then he may go back into BRCM at a lower level? Well he sells the LSI and pays another 20% to Uncle Sam if held a year, finally buying back some BRCM.
Too my little mind, this is a lot of jiggling of ones portfolio, and adds extra risk. If you do the math, Jubak will lose money and have been better off using a Buy and Hold strategy with the BRCM. If he is really worried about BRCM tanking then perhaps buying some puts are in order. The top broadband plays in the semi sector tend to move as a herd. If BRCM gets hammered then LSI in all likelihood is going down as well.
Just doesn't add up, even given his 12-18 month time frame.
To me, BRCM like MSFT CSCO and others is an I don't care stock. No body, no thing, not even the DOJ will make me budge. Only a fundamental change in the story of the company can make me sell. I don't see that change and neither does Jubak in reading the article. One other tenet I use: The danger is not in being in BRCM, the danger is in not being in BRCM.
Regards, |
