In answer to your rhetorical question, “Why ORCL?” The best reason I can give is because it’s a great company that is currently undervalued, or at least close to being undervalued, depending on which growth statistics you believe. At any rate, it’s not OVERVALUED relative to it’s earnings. My comfort level is $8 per share. Getting my cost basis below that figure through options, short-term and LEAPS, will let me sleep at night.
I agree with you as far as the quality of the company, my point --and I need to say that I say this in good spirit, not with the willingness to argue at all-- is the following:
Think in terms of asset allocations and how BEST to extract a return on the same assets.
Investing in ORCL: (I am making a quick glance analysis to make the point)
Positives:
Strong company, that holds a large market share of its market, so in short, it is not going bankrupt soon. Strong finances. Relatively undervalued (here it really depends on future earnings and there could be a question here, nevertheless, it is NOT a dog that loses money every quarter).
Negatives:
The main one, IMO is that for now, the market hates it AND the tech industry/sector is in a depression as far as stock prices go.
Now...
Buy low, sell high... yes ? and how is it that you want to buy low? Well, I guess the current levels are low in comparison to what it used to be. This, however, assumes that we will go back to previous levels... will we get there? A = I do not know, AND most importantly, HOW LONG will it take?
This last question becomes VERY relevant from the perspective that there are other companies, that are making higher highs today, AND in some instances new 52 week highs
I will illustrate...
Take a chart for ORCL, and then compare it against the following charts, using the time reference of Jan 1, 2001 and April 1, 2001 to present.
The reason I am suggesting these time periods is because they are important periods in relation to what it has been going on in the market...
Ah and before I forget... turn off CNBC or similar... these guys have been calling for a bottom, or the end of the bear market for months now... my point is, as I said in my earlier post... looking at these charts, one has to ask...
What bear market?
I used a program called TC 2000 to scan and find these stocks. It really is no rocket science. There is a thread here in SI about them:
tc2000.com
It does require discipline to study the charts, and then do some research on their fundamentals... and the magic of it all is that it can be done through the Internet; one does not have to leave the room. Ah yes, and don't forget to turn off both, the doomsayers, and the perm bull (chiters).
I am not afraid to sell short where it is warranted, but believe me, short selling is an art in itself and it requires even deeper research and, at times, nerves of steel.
The best at the short selling game, IMO is here:
Subject 51138
Michail, is very good at what he does and above all... he is VERY disciplined and a great "allocator"
This means that he manages his positions in an excellent way, to the point that the effects of the markets are reduced through a well-balanced portfolio. He has several posts in he above thread that covers a number of important aspects of the investing business.
I will use 5 charts to compare against ORCL. (With the purpose of illustrating alternatives), and remember, you could diversify and if you so decide, include ORCL as part of the total picture.
The candidates are 6. Three of them, I found a few months ago, (sometime in Feb - May) Remember, I made my moves earlier in the year, so, some of these are entering the "overextended" area... then again, it depends if their fundamentals continue to perform as they have so far...
The other three are new finds in the food sector, I have no idea if they will continue upwards, nor if they will survive a possible market meltdown, as it appears we are heading to such scenario given the increasing pessimism. --This gives me a glimmer of "hope" (wrong word in this business [gg]) but even then, a well diversified strategy AND NO MARGIN, may make being invested a reasonable risk.
Soon we shall see. First... ORCL
stockcharts.com[w,a]declyymy[d20010101,20010821][pb50!b200][vc60][iut!Ub14!La12,26,9!Ll14]
The first 2 stocks used to trade at the NASDAQ... BOTH moved to the NYSE, I view this as positive, and no, I had no idea they were doing that... but who says luck does not help? [gg]
ASW
stockcharts.com[w,a]declyymy[d20010101,20010821][pb50!b200][vc60][iut!ub14!la12,26,9!ll14]
FBC
stockcharts.com[w,a]declyymy[d20010101,20010821][pb50!b200][vc60][iut!Ub14!La12,26,9!Ll14]
AAON
stockcharts.com[w,a]declyymy[d20010101,20010821][pb50!b200][vc60][iut!Ub14!La12,26,9!Ll14]
The new ones:
K
stockcharts.com[w,a]declyymy[d20010101,20010821][pb50!b200][vc60][iut!Ub14!La12,26,9!Ll14]
SLE
stockcharts.com[w,a]declyymy[d20010101,20010821][pb50!b200][vc60][iut!Ub14!La12,26,9!Ll14]
HNZ
stockcharts.com[w,a]declyymy[d20010101,20010821][pb50!b200][vc60][iut!Ub14!La12,26,9!Ll14]
Again, these are not recommendations, these are alternative ideas presented to illustrate a point.
Sometimes, I go in and out of the same stocks attempting to save me from the "retractions" that no doubt will always happen, sometimes I am successful, sometimes not.
Good trading. |
