<The scary, but completely understandable, thing is that Reginald Middleton, that paragon of enlightened prudence, had to contemplate the cost of admission today before jumping onto the train tracks holding a big banner that says "Run me over!">
Iam love to ride the bandwagon. But, you see the problem is I need to make sure the horses on my wagon are not running off of the cliff. The reason I would not short this stock now is the fact that I don't now how high market sentiment will push it, but i do know that:
1.)it is significantly overvalued
2.)it is coming up to a secondary offering
2.5)the secondary will further dilute earnings
3.)historically, secondary offerings in a volaitle stock practically "guarantees" downward prices
4.)the stock has been through this boom bust before
5.)they have a lot of stiff competition
6.)NSCP is still negative from the time i first posted.
7.)the upward movement is perfectly understandable, considering everybody and their mother went up with it.
8.) I am a contrarian by heart, (this is where risk taking comes into play, being able to bet against the crowd - I was bearish on NSCP 5 months ago when all of SI was a go-go and was absolutely right, and although I am not necessarily bearish now, the stock's fundamentals are ridiculously out of skew (reference the study on my sight and the secondary offering coming up)
9.)if the only thing holding NSCP up is momentum, and it is as overvalued as DCF shows, than downward movement is invetable, and the (put) profit from it is COMPARABLY CHEAP. The profit form the upward movement is EXPENSIVE at 300x next years anticipated earnings. (remember risk vs. reward)
RCM's next prediction (I hate doing this because it leaves me open for error, but what the hell) - NSCP will ride a significant wave up (which it practically has already), and then correct relatively sharply, drifting slightly higher until either the earnings report or the next round of product releases. If MSFT releases first, downward and if NSCP releases way above estimated earnings or releases decent products then a slight but sharp upward spike. In the meantine I risk VERY limited captial but still get to participate in any significant movement of NSCP in either direction.
You have a lot more to gain by putting NSCP than you have by buying it long, both statistically and from a dollar standpoint. and if you wish to play the neutrality game, one can find the options least affected by NSCPs extreme volatiltiy and euphoria and play it that way. Believe it or not, their are times whan the calls have traded at fair value or slightly below/above.
I think it is safe to assume that I am the contrarian here because the entire market rallies the day or two after VERRRY predictable election with decent rate environment and econimc/inflation standing. That is a positive in my opinion, for I definitley shouldn't be the only one. Watch me stand by and wait foir NSCP to drop while simultaneoulsy riding any wave. I see it coming, again, y'all. |
