Are you trying to draw me back in? Is this a bad replay of Godfather III "every time I try to leave - they pull me back in" (imagine the Al Pacinos hands clawing and pulling, LOL!).
OK, re: DIR. I'm hardly endorsing DIR - that was just an example of a financial/brokerage stock with a p/e that's not dragging the pavement - 150 or so. Some would have you believe that all fin/brokerage stocks are law-bound to have low p/e, so poor NITE is excused.
My point was that even this high p/e brokerage stock jumped by 9% in a negative market Friday (and gave back 3.5% today, interesting contrast with NITE that gains 1.4 but gives up 3.5%).
There are several of these high p/e OLBs. My non-stop rant last year, was an urging that KP take the opposite tack of what he actually did. I WANTED momentum players, I WANTED a high p/e, and I thought the momentum from April should have been stoked instead of killed.
That way, if you DO decline like DIR, you are declining from, say, for NITE (I'm doing a rough conversion of what the p/e for DIR was at 45) $1200 to $200. Now, you'd be sitting on a $200 share instead of a $31 share. Now, isn't that better? And btw, wouldn't that Arbitrade acquisition have been oh, only some 5 times cheaper? Hmmmm.
As I repeated many times - if you are to decline, better from a higher p/e than a lower one. Also, you are safer in case of a vulture takeover.
Morgan |
