Dave, nice post. No one has any answers they are shooting in the dark. You want AMAT, I would like BEAS..does that mean I'll play pin the tail on the donkey with a blindfold and get it because its been hammered. Many of these are STILL trading at high multiples and guesswork is all that I see for arguments at going long. I was really ready to give CSCO a fair shake today, waiting for something close to my breakout price of CSCO and what did I get. Closing near the low of the day. Would I buy CSCO now or SEBL, or SANM.. Not in a million years. Would I get a stock like BRCM, BRCD or anything that trades at 200X earnings or 3 or 400 times earning? Never.. I'd trade them until eventually people realize there is no future in these stocks until they get to double digit multiples.
I'd trade them until we are convinced that all the obstacles are taken out of the way. We have all been brainwashed to buy the dips and I am not buying the dips. I will buy dips if I see signs of multi-day reversals, until then I TRADE the dips. I am shorting the rallies and if I buy the dips it will be for the 1-2 day rallies and then I too will 'sell the dip'... and let someone else buy my dip. And when everyone buys my dips and your dips, we'll short them. And when everyone thinks stocks like AKAM, INAP, INIT or outit.. or upit..or aroundit or whatever you call it has finally recovering.. I'd short those also. And what of the lone stock that hits a high of day, is gobbled up, only to be short bait the next day. Another fallacy. Some of the best shorts are stocks that 'buck the trend' for one day. You can pretty sure today's most up list is tomorrow's most down list. That is no way to pick stocks. Sound fundamentals, improving technicals, sector strength is the only way and not swooping in on that poor stock that manages to up for 1 hour, is devoured only to move down tomorrow.
When all is said and done I still like stocks like LU, CSCO and yes, even AMAT and EPNY but why buy SUNW or AMAT only to see them get cheaper by 10% next week, and leave the blimps for others and hold short term when earnings come out and another house of cards comes down.
There is more upside in sectors that aren't constantly being downgraded and targets raised one day only to be lowered the next. I like going long but not technology...I like JPM, NTRS.. still like the health care sector select drug stocks and once in a while a stock comes around that I like. I love MUSE.. I love it going up and I love it going down also. |
