Addi,
The problem that the techs have now is anti-intuitive. If one thinks that LSI will return 7% on investment over the next five years, that beats 6% return from a bond. Many people buy, and the price appreciates by 50%. However, when Asian flu is factored, analysts say LSI may only achieve 5% return. As a result, almost everyone wants to sell, and the price depreciates by 50%.
The short version: a VERY small revision in numbers can lead to a hugely disproportionate fluctuation in stock price.
Fortunately, we are long-term investors. When double-digit earnings growth returns, so will the disproportionately LARGE growth in stock price.
PS. DLO... Trust me, you don't want me on your side, that would almost guarantee a meteoric rise to 27. Or, maybe you do... |
