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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Uncle Frank who wrote (34555)11/10/2000 11:49:08 PM
From: Mike Buckley  Read Replies (1) of 54805
 
Frank,

I was with you all the way down the fairway until you got to the following:

It is clear that while many made money investing in Qualcomm in 1999, a large percentage gave it back in 2000.

I contend that one does not "invest" in a period of one year. The short time-frame is only for speculators, not investors. Investors endure the ups and downs of a long-term investment whereas successful speculators might occasionally ride a stock up and adroitly sell it before the paper gains have evaporated.

Moreover, had anyone invested in Q at the absolute highest price of 1999 which occurred only during the very last week of the year, the current paper losses would be about 60%. Whereas that may seem like a lot to some people, the nature of typically volatile high-tech stocks is such that a 60% loss during an initial 11-month period is not particularly unusual. It's not fun but it's also not to be a surprise.

Adding to the statistics, if anyone had invested at the worst possible time during the other 51 weeks of the year, the current paper loss would be about 45%. Many of us wrote in the thread that Cisco tanked 40% three times and that this is to be expected of any high-tech stock.

Moreover, had anyone invested in Q at virtually any time during the first ten months of 1999, the smallest paper profit would be 25% and that would be in a period of 11 months. The maximum paper profit one could have gained by investing in the best time of 1999 (the first week) would be a massive 878%.

--Mike Buckley
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