Well, may be I am not the right person to answer this as I sold 2/3 of my AMAT around 78+ and the rest about 70. But the rationale stays the same:
(1) It rarely pays to fight the tape. *Before* I open a position, I set my expectations for the stock. If the stock does not behave accordingly, then it is obvious that I don't know what I am doing and I should get out. When I bought AMAT before the last earnings, I publicly stated that if it does not go above 80 soon, it is fated to drop and I'll get the hell out of its way. Well, it went above 80, but soon retreated. So I sold. My only regret is that I waited too long to sell the remainder of my position.
(2) My tape watching for the past few weeks has told me that AMAT is too sluggish compared to NVLS and SMH. It doesn't matter if they fell as much as AMAT; on intraday basis, AMAT is not behaving strongly enough compared to some others. This is never a good sign.
(3) AMAT is (was?) somewhat expensive both on historical and relative basis. So even if you believe in the semicaps, you might want to sell AMAT in favor of some others, unless you believe AMAT has a technological advantage. The "one stop shop" advantage never holds much water with me.
(4) Even if the market is totally wrong, the words "The market can stay irrational longer than you can stay solvent" should never leave your mind. I am not too greedy; if my stocks misbehave, I sell them. If that proves to be a mistake later on, I buy them back. The market is like the sea; there's always enough fish to eat.
(5) You should consider the possibility that the stock market may be right. Even if the stock market is wrong now, the stock may stay depressed for another 2 quarters and by then a real slow down may be on the horizon. I don't have a crystal ball that can see that far into the future. So most of the times I respect what the market has to say (though on occasions I give market the finger).
(6) The dramatic rise and fall of Nasdaq has been well correlated with the liquidity trends from Bank of Japan. There's a lot of foreign money in the US market. This is very impatient money that has been here only because things were lousy back home. A poor performance here may (if it already has not) lead to large out-flow of foreign funds. The old saying "it takes a lot of buying to push the stocks higher, but they fall on their own weight" is very true.
Personally I am hoping that within two weeks enough companies announce good earnings to turn the tide around. But I think this situation may continue until January.
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