Steve et al,
This is my amateur TA again. Let me do this analysis to show how cheap this stock really is. I hope you folks don't think this is too dumb, but really most people can't think clearly after seeing a stock goes down.
You folks remembered I was day dreaming about $80/share as my magical price to reach my financial goal. Well I said that when my average price was at 26, so from 26 to 80 , it's a 308 percent gain. Since I was lucky enough to bail out from most of my shares when I sensed that the Asian trouble was starting to develop, and then I bought back my shares this morning at around 20, this stock only needs to go to (20*3.08)=62 bucks now for me to reach my goal.
I know this sounds really dumb and so basic but a lot of people can't sense how cheap this stock is. 20 to 62 gives the same gain as:
- 26 to 80
- 28 to 86
- 35 to 108
- 39 to 120
Get the idea? I remembered back in August, when the stock was at 30, everyone was so confident that this stock will go to 80 in 6 months. Then when the stock was at 39 before the earnings release, everybody was thinking this stock will go to 60 after earnings. And now we are at less than 20 and things are only getting better with this company, are we still thinking this stock will go to at least 60 no later than the end of next year? If this stock goes to 60 from here folks, it's the same as if the stock goes to 120 when the stocks was at 39. For this stock to go to 120, it will require either a lot lot of growth, or the stock has to get a lot of publicity from some hypist such as Cabot or H&Q.
I know people who follow the CANSLIM method or momentum investors will tend to buy stocks at high price. So the higher the stock goes, the more they pile up and then hope that the stock will go to some astronomical price. On the contrary, when the stock is low then nobody wants it. When this stock was at 39, everybody thinks that it's a piece of cake for it to go to 60. It's now at less than 20, why would you think it has less chance to go to 60?
You're right Steve, we wished the stock to be lower so that we can buy more. Now it's our chance. Folks, 20 to 62 is the same as 26 to 80, and 28 to 86, and 35 to 108, and 39 to 120. |
