| |
RE: One-day versus five-year perspectives
Ardner,
Welcome to the world of IOM investing and analysis
online. I hope your investing is successful for you.
If you want to see why some of us don't particularly
care what happened to IOM during a certain day last
week, take a look at the truly long view, thusly:
chart1.bigcharts.com:80/report?r=cobrand&site=dailystocks&onbad=cobrandsymb&symb=iom&time=20&uf=1024&draw.x=50&draw.y=9&sid=2646&sec=c&xyz=248950062&s=23016
You'll see from the chart at that URL that Iomega
has taken off in the past few years, since the introduction
of the Zip. There have been a couple of momentum run-ups,
most notably the huge one in spring 1996, but when those
collapsed, the stock didn't fall through the floor into
oblivion as bears like Rocky rashly predicted. Rather,
it settled back down to a steady climb that underlies
those momentum perturbations.
Why has that happened? That has happened because of the
usual fundamental reasons that drive Peter Lynch's very,
very successful growth-stock investing philosophy, namely,
solid quarter-over-quarter earnings growth and good
management. There is nothing to indicate that either
the solid earnings growth or the good management have
disappeared, nor is there any evidence that the markets
for the Iomega products are yet reaching saturation, and
all the predictions so far that the Zip will crumble before
the competition have proven laughably wrongheaded. Iomega
is way, way out in front of their competition.
So relax, and just rerun that URL I've included about
once every quarter or so. In another year or two, it'll
be topping at around $60 pre-split. If that's not enough
return for you, and you want to day-trade a stock that
follows the big names like IBM up and down with the daily
fluctuations, then you probably ought to get out of IOM
and buy IBM instead. Alternatively, you could watch how
IOM behaves day-to-day, which clearly shows some patterns
of its own, as people on this thread have been helping us
to understand, then capitalize on them with options plays
and strategic day-trading. Although it's now showing some
signs of settling down and consolidating, as Gary W. has
helped us all to see, the price of IOM has fluctuated
enough from day to day and from week to week to provide
ample opportunity for shrewd day-traders and options players
like Truflette (who has far more stomach for that kind of
thing than I do) to pocket some nice money at the same
time that they amaze, entertain, and enlighten the
long-term investing tortoises like Jack Knudsen and me.
Trying to estimate the long-term prospects of IOM on the
basis of one day's behavior is like concluding that your
child will grow up to be a hardened felon because he or
she stole one cookie out of the cookie jar this morning.
Cheers, Tom (long IOM) |
|
