I, too am confident of a rebound. I CANNOT say when, simply
because I do not know. I am NOT a technical analyst. That particular
style of analysis serves many people VERY well. I just really
have never fully understood it. I do respect those that use it & follow it.
Market fluctuations are very normal occurences. About the time I was actually developing an interest in the market, it went DOWN for THREE
years in a row! (1972-1974). 1990 was also a negative year. We had a
market crash, it just took 4 months instead of 1 day, as it did in 1987.
All I am, and have been saying is, if you let me buy a company that
has been growing at the rate MEMC is, and I can buy it at 8 times next
years current estimated earnings, eventually I AM going to make money!
Going from $24 to $55 in 5 months was a lot of fun! However, if ANYONE
thinks that is "normal", then I suggest they get out now! Stocks to do
not continue to double every five months.
To loosely quote Peter Lynch when he was still running Magellan fund:
"I have owned Merck stock ever since I took over Magellan. The company
has grown at 28% a year.... Miraculously the stock price has increased
at an average of 28% a year since I have owned it!" (The "miraculously" was said with as much sarcasm as Lynch could muster.)
WFR was, IHMO extremely undervalued at the IPO. It has still just about doubled in it's first year. It's growth rate is over 30%. My
guess is, despite the peaks and valleys, the stock price will, over time, appreciate about the same amount as the earnings do.
I do not "bet" on the market. I look for a company that has unrecognized potential, that I can understand what they do, study my butt off, and do my homework. THEN I invest. If anyone gave me shares
of Prestek, or Zoltek, or America On-line, I would sell them! There is
no way I can justify owning those companies at their p/e's & given
the markets they are in, the technology they posess, the competition,
etc..
I miss a lot of high flyers that way, but I'm not the darned fool that
bought Prestek at $200.00 & watched it fall to $60.00 in a month, either. If I want a thrill, a rush, a high flyer, I'll go bet a Turf
race at Arlington Park in Chicago. (My compter does about 42.00% picking turf race winners at Arlington). But that is NOT investing.
Regards,
Doug |
