Congrats on getting out before it had fallen too far. 20% in one day
without any issue related news, just overall maket weakness at a
1.3% decline (less on NASDAQ). Looks like you put in either an
actual or a mental stop after all.
One thought. My opinion is that the momentum run has been broken. It
may stage recovery attempts, but they will soon falter. We won't
see new highs again until we break at least 50, probably 40, maybe
30. Doubt it will go above mid 70s again before that, and may not
even get to 70 again before, esp. if market does in fact fall further
on inflations number fears tomorrow.
You got out with a profit. Think how all the people who now have some kind of loss, large or small are feeling. They've been watching this invincable freight train. Truth be told that's why most got in. They wanted the story and it sounded good, very big possible future. Probably not a lot of spreadsheet modeling of possible future cash flows. Reason for believing the story? Well, plausible. And look at the stocks gains, in so little time, with very small corrections!!!
They are now very nervous. 20% down in one day. Maybe this thing CAN crash as fast as it rose. Or faster. IS it over? It really IS
cheap NOW, right? Why? Cause it was so much higher yesterday. It
won't fall more again in a few days will it? No can't. Its cheap.
How many of these people truly have a firm conviction that at current
prices the stock is now a bargain, over the near or even intermediate
term? But probably most decide to still hold on.
Maybe the stock does recover some tomorrow, and or the next day. Certainly won't recover the whole damage. And then what happens when it falls five points suddenly again? Do you think there will be a scramble for the exits? Then what happens?
I'm just describing momentum thinking on the inside. And since, in
truth there is nothing else supporting these prices AT THIS POINT IN
TIME, watch out.
Personally, I like this story longer term. A lot. I'm a buyer in the
thirties. Averaging down, once the knife stops falling. But this
one is either going to keep falling very fast or will trend lower for
a long time. Either way, its going to get into some kind of alignment
with the underwriters price targets ... which were 12 mo. out, and
as aggressive as could possibly be supported by any known prof. valuation methodolgies, and a stretch at that, in my opinion, what I say of H&Q's.
So I'd wait before you jump in.
Take a looke at Qcom. I think that's a pretty interesting story.
Regards |
