"Buy on the downgrades, sell on the upgrades."
It doesn't take a rocket scientist to realize that CKFRs shares have appreciated abnormally over the past week; however, what does take intelligence is to anticipate where the shares will be trading over the next 1 - 3 years based on FA. Sure, short term, CKFR will probably give up some $$ and that the recent news has no 12 month earnings effect. BUT, the whole point in investing is buying a stock with anticipation for LONG TERM appreciation and business success. It's clear that the recent deals poise CKFR for long term success. As a long term investor, I can care less about the 30% gains here and the 10% losses there, as long as the gains outweigh the losses! These analysts just irritate me with their stupid wisdom. If he said that his downgrade is based on readings he's been gettting that CKFRs road to profitability looks like it'll take significantly longer than expected, that, I can respect and act upon. But, just saying the obvious is ridiculous. It's about as bad as Eric Gregg's strike zone in the Braves'/Marlins' LCS!
IMO, Lehman's downgrade was made too allow the firm to buy some shares cheaper bacause they missed out on the original move from $15/$20 to $30. Also, I wouldn't consider, from a fundamental perspective, that taking a stock from a buy to an outperform is a downgrade for long term investors. As you stated, we want outperform!
The short term profit demon is very powerful, until you realize how much money you'll pay in taxes on the trade. I'm willing to sit on this one and take profits 5 years down the road. |
