Patricia,
Nice article. Amazingly inappropriate usage of a statistic though. Which makes the whole thing basically hogwash. Gross generalization garbage in, garbage data and conclusions out.
This stood out to me:
<He looked at 1,900 tech stocks going back to 1987 that had dropped below 10. He found only 3.4% made it back to 15 the following year.>
Lets lump the 10 or 20 "real" companies, with real businesses, and real earnings into that sea of 1880 obscure stocks and make a gross generalization?!? I'll take ERICY at $5.50, I'll tkae TKLC agian at $7 if they will ever give it to me, I'll tkae atml at $8.50, I'll take GX at $9, I'll take ET a $6, I'll tkae AFCI again if they will sell it ot me at $7 again someday, I'll take some RFMD under 10, some MCLD, some ADCT, some LPX, etc. All have or did find their way into my portfolio in past years at under $10, when nobody ever would touch them because of "bassackwards" thinking like portrayed in that article. Its not the below 10 that decides the long term fate, its the business itself. Or should be anyway!
I would certainly bet the "3.4%" which recovered were these type companies. And I won't sneeze at below 10 to 15 in a year. Its at least 50% return.
Just pick the right 3.4%. |
