Hi Joel,
The herd mentality is interesting. Take the institutions for example. Now, I spent a ton of time doing some research this weekend, and you know what I found out along the way? For the obvious risk/reward deal that presents itself by the look and appeal of its chart, IOM is way low on institutional holdings compared to many of the others. Why the imbalance?
Is it the huge amount of short interest that makes the funds feel scared to take a position? Because, really, when only a few smart, courageous, fund managers with nerves of steel and clear direction and conviction in their beliefs, start buying the stock,....and then other, lesser-toothed fund managers join herd, IOM will literally shoot the moon because of all those short positions (please don't be offended), and well...DEAR GOD that's alot of money FAST! Perhaps it's TOO much money TOO fast. They are afraid of making that much money so fast! Maybe they'll NEVER be able to copy such gains in 1998 and be considered losers for making too much money in 1997. Or, in a deeper, more psychological sense, maybe they feel guilty about it. Maybe they should read "God Wants You to be Rich", maybe then they won't feel guilty for investing in a great company with a neat product even if its' stock makes too much money too fast. Joel, I'm not a fundamentalist in any way. You know that. But, this stuff is fascinating sometimes. What's your opinion on this?
Thanks!
E |
