Vinod, good analysis and good job, at least for the short term.
Please note that I do not have any position in MSFT at this point of time (sentiment was long at 57 two-splits ago in 1994, and was for getting out at 145 just a few weeks ago; anyway). So, what you'll hear me say here should be just taken as purely neutral, as I'm not biased either way in the short term. Because of your meticulous nature, hard work and a desire to share your analysis here, I thought that I may share with you my experience, which might help you book your profit with your latest MSFT position. Thats the whole point ultimately, isn't it? ... it won't help you to just have paper-profits to show and associated congratulations while u'r $$++. So, please pay particular attention to the price-dynamics very closely. Because what happens with MSFT is that, whenever a bad news like this one hits the street, it keeps rolling down (naturally, since its always been at a high PE level). But, a subtle psycho-mechanics of the masses comes into play right away, to the effect that, MSFT behaves like a spring getting compressed. And, as soon as the pressure above shows any signs of decreasing (or even remaining steady), it recoils back up or snaps back very fast ... just like a King-cobra comes out with its expanded hood in miliseconds ... and MSFT-bears just collapse down ... not even having a chance for a microsecond for their cerebral synapses to make a connection and think and wonder what might have bitten them so quickly! Now, I'm not saying that this is anything good or bad, its just that the engraved-bullish-momentum from the masses' brains is hard to be erased. And you do not have much time at your disposal either! A short swing up can bring down any bear's morales instantaneously ... and MMs do try to employ this trick to shake out the weaker players, from time to time, even during a secular trend. So, please watch out. If I were you, and if I say, can not monitor it closely, then I would simply put a mechanical stop at 10-12 and just count the blessings, if any, with this. Otherwise, it becomes too much of an emotional turmoil, for what its worth! I understand everybody's situation is different, so this is just .02 cents worth, if any. But good analysis, call and action on your part, nonetheless.
regards to all,
-/Sonny. |
