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Biotech / Medical : Geron Corp.
GERN 1.475-2.6%3:59 PM EST
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To: arun gera who wrote (215)8/17/1997 2:19:00 PM
From: songw   of 3578
 
It always amazes me how intelligent people can't seem to switch between value investing and momentum investing.
Is this a right brain- left brain problem?

Shorts are trying to use a value investing formula when this is clearly at least for the next few days a momentum play.
Here's a way to tell whether its a momentum/news driven price; will a majority of people who hear this news say "wow"- if so what % will take a throw. Clearly it meets the wow test-and clearly some part will be buyers.
Next think of waves- has every potential buyer heard the news?
If not don't short it. Wait until you're sure all those potentials buyers have stopped saying "wow" and start saying 'yeah i heard about that"

THEN start applying the rules of value investing. To do it prematurely is lethal-as you will see tomorrow. Remember for the next few days this is about the STOCK not the company.

Here's why -GERN will gap who knows how much on new buyers with market orders. Some % of the premature shorts will weaken-it doesn't have to be majority only say 25%- they will cover and the market makers smelling blood in the water will push it up (they showed they were willing to do this fri)

Trying to trade in and out of this kind of action is almost always suicidal-most resort to market orders and essentially are saying I'll take whatever execution you can give me.

A better way to approach it is decide what price you'd like to buy-use a limit order and don't try to sell into the up action. If it falls below your buyin price avg down using limit only orders.

As for you shorts- you will certainly have your day- it just won't be tomorrow

PS Watch CYGS on nasd bulletin board for a penny sympathy play
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