***AOL was up 6 points yesterday, and only down 1 1/4 this morning. This has been
the pattern for months. The ups have been much more than the downs so that the
stock has climbed to 91. No wonder investors are skeptical about the market. AOL
selling more than GE, INTC, CSCO, all solid companies. The growth rate cannot
be maintained now that they claim having 9 M members. Seems that the small
investors have no chance***
For the last couple of weeks, there have been more downs than ups, consequently the stock is about 10% off its high or 92 or so. . . I expect this trend to continue. What's interesting is that all the longs, who supposedly understand the nature of manias and are confident that they can ride this stock until the peak and then jump off just before it goes over the cliff, are still in the stock. . . When it hits 75 they'll still be here, waiting for that last surge upward. They'll still be around at 70, I'm sure, stammering about how much potential there is and about how this is just a minor dip, etc. At 65 I expect a few to get worried, around 60 they'll start wondering if they shouldn't sell, and by the time it breaks 50 some of them may even have to admit that maybe the peak was back up around 90. Of course by then it's too late. . . Isn't this how it always goes? Go over the Ascend thread and check it out . . . The stock's at 25 down from around 85 and you can go back through the posts and see the same pattern that is about to be exhibited here. Of course, now that I've posted this, I'm sure I'll get a few responses telling me how AOL is different--I made a few comments about IOM the other day, and several individuals were indignant and assured me that AOL could never drop like IOM after its big runnup. There's nothing more entertaining that a "it's different this time" argument. . . For now, though, it appear that the bulls and the bears are at an impasse--let's get back together in 6 months and see how things are. I'm betting AOL will be trading around $35. . . (that is assuming that market is still willing to give them a P/E of 60+, putting them in the company of Microsoft, Coke, and other truly great companies). |
