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Strategies & Market Trends : Z Best Place to Talk Stocks

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To: DanZ who wrote (39401)	5/7/2002 9:18:18 AM
From: Joe Stocks	Read Replies (1) of 53068

>>How much does a stock have to rally before you believe that a bottom is in?<<< I could ask, how much does a stock fall before you call a bottom? stockcharts.com[l,a]daclyyay[dc][pc20!c50][vc60][iLb14!La12,26,9]&pref=G What I am saying is calling a bottom on a stock while it is falling with a chart like ORCL is dangerous. It would be the same as calling the homebuilders at a top to start shorting them. I have been thinking homebuilders have topped out for the last year and have been wrong. I can't see how you can justify your strategy with recent examples of AOL, GE, ORCL, TYC, WCOM where all have fallen more than what most would have thought possible. I remember that it was thought foolish here that AOL could fall into the teens just a month ago. I also recall that some were buying using the same thought process you are. I'm not saying that i don't do the same thing. I just know that when I do not wait for the trend to change I usually regret it. Leave it those that have few fingers to catch that first 10-20% gain of the bottom is my opinion. >>PS: I don't really understand your comments related to PS, PE, and PB. With a trailing PE of 19 and a long term growth rate about twice that much, ORCL is trading at a reasonable valuation using traditional old economy valuation methods. You are just choosing to use 1 year trailing data and I am using 3 and 5 year data.<<< I'm not using one year data. I think it is not proper to use 3-5 year data on a stock and industry that has moved from the growth stage to the maturing stage on the s-curve. Using your logic would be like predicting returns for the next 3-5 years on the last 3-5 years. I'm sorry but I think we won't see times like the late 90's for a long while and valuation projections should based using much longer historical data. Joe

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