To Gerald and Greg:
Congratulations on your profits, but I have a warning to you, which I learned
a hard way.
It is not a smart idea to buy a stock just because you use a product the
company makes. You can be lucky, but never never do it again. You have to
understand the stock, the market, and what everyone else's expectation to
be ahead of herds. If you are ahead, you will be right most of the time. If
you are right 7 out of 10 times, you will be very rich soon.
When a stock keeps going up, it is hard to convince yourself to cash it out.
You always say to yourself "I'll sell after it goes up another $10." Well,
it won't "go up another $10" forever. When a stock reaches a top and on
its way down, you always say to yourself, "well, I think it reaches the top,
so I'll sell it when it bounces up back to the previous high." You know what?
It probably will never reaches that level for a long long time, if ever.
It is harder to figure out when to cash out because of emotion involved,
but you have to cash out one day.
You should do one of the four things:
1. Don't be greedy, you should congratulate yourself and cash out when it
reaches your target. "Let someone else make more profit with a higher risk".
2. Protect your profit by placing a stop order. It is hard to set a "right"
price for a stock like NSCP. For example, if you think NSCP will keep
going up, but just in case it starts to come down, you want to be above
the water and cash out, you can place a stop order at, say 140. If NSCP
comes down to 140, the stock is sold and you still make a profit. (This
is the hardest of the four things you can do.)
3. When option is available, you can buy a put option at, say, 140. With a
small premium, you will be protected at 140.
4. If you already double your money, sell half of them after the split.
You will enjoy a ride if it keeps going up, and you will NEVER lose money.
Don't believe if someone says "XXX will be next YYY". If you look at the
history, when many people expected a company to be the next YYY, it never
materialized. In order to be the next IBM or MSFT, a company has to do
everything right. If the company makes a small mistake, it is doomed. I
don't believe NSCP will be the next MSFT, because unlike MSFT, NSCP is never
intend to dominate O/S and application software. NSCP can be a very
successful company like ADBE or SUNW, but it won't reach a level of MSFT.
Just my two cents.
P.S. At 153, NSCP is moving out of the trading range of 120-145 decisively
(high volume, and staying there), a very positive development. Watch out!! |
