<font color=green>► The Long and the Short of It
TraderXx..We are just chameleons, we go with the trend and its the fundamental analysis of the tech sector in September and the realization that they could NEVER have sustained multiples. Investors were buying tech stocks by the boat load at higher highs and running them up. Those are the facts and the analysts, money managers, brokerages were fanning the flames by raising the price targets to idiotic proportions.
I have gotten scores and scores of e-mail from INVESTORS that wished they had listened to threads like ours (and of course others) that were insisting the valuations were too high. I also have a few dozen letters of those that 'ridiculed' for DARING to attack the valuations of JDSU, BRCM, BRCD, BEAS, NTAP, PMCS, SDLI, MCDT, NTIQ, IWOV, EPNY, and at least 2 dozens stock altogether. We have the posts, we have the e-mail, those are the facts. We have SIMILAR posts in the March RIGHT before the April when the INTERNET era collapsed.. We have those posts as well.
Some posters and threaders spent weeks, and months touting a small number of technology stocks ad nauseum and getting some followers to buy these PUMP schemes.. This was NOT a PUMP and DUMP scheme. They just were either enamored with the company and didn't even check the see if the fundamentals of the company made them worthy of this adulation. The PUMPERS lost their shirts also. Just TOO MUCH PUMPING. They pumped and we questioned and started shorting.
The trend change developing at the time was VERY CLEAR. Investors, ignited by the soaring stock prices, wanting to get more and more (and there is nothing wrong with that) but if they had read some of the contrarian opinions at that time they would have avoided this mess.
I just bought for the swing and very short term position trade. MYSELF AND OTHERS ON THIS THREAD WERE SAYING THAT THEY LOOKED LIKE THEY WERE SATIATED. I have all the posts while at the same times threads, analysts, financial articles were touting the "strength and bullishness of the tech sector".. I smile now because I have the posts, and I have some articles from other contrarians at the time, which I saved as well. Probably will put them all together (with posts from other threads) as a compendium and analysis of the entire last 7-8 months.
We were able not only to overcome that 6 months of famine after the 6 months of feast, but we enjoyed BOTH THE FEAST and FAMINE.. because we went long the FEAST and went SHORT the FAMINE. That is the reason we succeeded so well and why I'm a happy camper. But we did give our posts, over hundreds of them, during the last 6 months about the BLIMPS the valuations, our shorting etc. Those that DID well during these last 6 months DO NOT NEED TO APOLOGIZE, FEEL anything but gratitude they did the right thing. There were a lot of us that DID the right thing, and yes we were rewarded handsomely, but we did SHARE our warnings WITH EVERYONE ON THIS THREAD. Not only that but we gave STOCK names, price targets, daily, weekly and even hourly.. What were the others threads doing.... BUY, BUY, BUY BUY.. touting stocks like CS, CA, JDSU, BEAS,SDLI, PMCS, GLW, EPNY,
So its not unusual for nerves to be frayed, support groups to form and people tempers flare. Its what happens when financial distress hits. Its denial, its regret, its a whole lot of things.
TraderXx, I can't speak for all regulars we have way so many great posts daily. But if you take a look at David, and Lane's and my posts, we are hoping against hope and giving techs and the market so much leeway and no one is saying the nasdaq is over. All we are saying is like we are forced to be daytraders because traders and (who knows who else really) are selling the strength. Its a herd fear, but they have reason to fear. And frustration and fear can have dire effects on the psyche, and we have seen that as well.
Its ironic the same groups that were TOUTING the techs when we were warning, are now embittered at those were able to short successfully. People get rewarded when they make the right decisions and might lose when they make the wrong ones, that is the way of world. That is why we take lessons from the past, as I saw from the internet sector, seeing an almost exact parallel and pattern emerging. I'm sure there were thousands of people that profited from the short side. There was PLENTY of short shares around, and when the markets peaked, it was NOT THE TRADERS that were selling strength it was the investors that were panicking and trying to cut losses.
Of course afterwards the analysts started downgrading stocks that had gone from 3 digits back to the mid 30's and 20's but you didn't hear from them before that. So if there was a chance for a recovery, the downgrades was like giving a critically ill patient a swift kick in the head. IT WAS THESE DOWNGRADES AFTERWARD that was the last straw. Take it into account also that someone was HIGHERING ESTIMATES OF THESE COMPANIES, DURING THE TIME WHEN IT WAS VIRTUALLY IMPOSSIBLE FOR THE POOR COMPANIES TO HAVE ANY CHANCE TO SUSTAIN THESE MULTIPLES AND THESE 50-75-100% INCREASES IN EPS going forward. (Remember how SEBL was doing so good until they admitted they COULD NOT SUSTAIN their growth levels)
In essence I once explained it like having Harvard charge you $1,000,000 for tuition saying well we are an elite establishment and in 10 years your son/daughter might be expected to earn this a year. You were paying 10 times what the stocks should have COST.
So as for us.. we will continue to try to add our little bit of insight and with all that has transpired in the last 4 years, we have done a pretty decent job! And its posters like yourself, Dave, Lane, Frederick Langford, Fallope, and others that give the trading and investing public a whole heck a lot of more excellent analysis, ideas and though provoking comment then those 'think tank' analysts.
I also want to add, that I think the shorters 'investigate' the companies a heck of a lot more than the traders going long which is ironic, because it should be equal.
I would not be that happy waiting for a tech folders to rise while others, who were shorting or even on the sidelines' were making good money. Waiting for this economy to improve is fine, but not while people have their money ALREADY INVESTED. I'm waiting also, but as 'tabula rasa' in cash and ready to take advantage of any trend change to the upside.
It is also ironic because its actually the traders (past shorters expecially) who have a lot to gain on the long side if the market moves up. Holding short positions overnight was getting riskier, but long positions would have been ideal because logically, there is more upside now than downside and we want to milk the long side. But there is NO LOGIC in this market at the present. Until some semblance of stability returns, I would not be long or short except a few put positions. WE will continue to post our ideas, analysis, chart patterns that work.. just as before. |
