Frank, I agree with your comment on CNBC. I did not find the information very meaty. It gives me pause to think if you think I'm not being meaty.
I've traded futures off and on in the past. Remarkably, my buys and sells often coincided exactly with some of the short-term charts my broker liked to use (I have not, generally, made money on futures contracts).
My point is that in some way I was using technical analysis based on similar principles that the computer was calculating, but doing it in my head (really no big deal).
Often, when I buy/sell stocks, I suppose that I am not only using fundamental analysis but technical analysis, too, if I want to trade as is almost always the case so far.
Regarding my timing of my recent CD purchase, then, it was based largely on fundamentals as such:
CD still stated they expect to earn $ 1 billion in 1998
CD @ $ 15.00 was selling way under the general S&P market
Money is still pouring into the market via retirement accounts, etc., and they will have to put that money somewhere. CD looks to be a good choice, despite reservations. CD would seem to be the lesser of two evils; namely, high priced stocks or a audit-plagued low priced stock.
Technically, if a bunch of funds decide to "lessen" their exposure to CD on the same day (i.e. day after bad news), that can artificially bring the stock price down for a short time. I thought that was the case as 12-15x earnings was way too low in my opinion relative to the market.
You wondered why I would include AOL and YHOO in my picks. First, they are fundamentally good picks, but the projections are sky-high so it does make them appear riskier.
For quite some time many of the best stocks just keep going up. Dell is like that. AOL is like that. YHOO is like that. LU is like that. Many don't like those stocks because of the "high" valuations. And yet these are the stocks that double almost every year, if not twice a year for years !
Any drug company is probably a good, long-term bet. I added PFE for diversity, though I think the most money is to be made in monopoly type companies which would also include CSCO, MSFT, and INTC.
Yes, they seem risky. In fact, many seem so high priced that I don't own them. However, maybe I should own them as my fictitious portfolios, without fail, have done extraordinary (I've done well, too, but I would have spent much less energy and could invest larger sums of money in these companies).
In a book I read by about Warren Buffet (Buffetology), it was said that the way to make really big money in investments is to invest other people's money for them and take a percentage. I don't do this now, and may never do it, but I am practicing, just in case.
By those who know me well say, "you could never hold a stock for a year". Maybe they are right. I hate to hold a falling stock. That is partly what allow me to buy such "risky" stocks as CD when it has fallen for a few days to very low levels. If I was wrong, and the stock kept falling, I could always sell some. Of course, if it goes up, like it did, I would make a lot of money very fast.
Because of my current philosophy of not holding a falling stock too long, I said, "if CD goes to about $ 13.00b, I plan to sell some". To hold it too long could be a disaster for me, especially since I was fully margined and had about 50% of my equity into it.
I hope this clarifies some of my thinking. I might also add that I read everything I could find on CD and believe that the main thing keeping CD down is confidence, which should build as CD stablizes, and the audit, which should be out in a month or so.
Frank, I too appreciate good concrete number exchanges, but I guess that I feel I've said everything that I have to say so I'm just waiting for the audit, etc., and hoping that I'm right.
I might sell CD at any time, based on the changing variables, but for now CD looks good for $ 20+, maybe even $ 25+ in the next six months.
Thanks for your input, and may we prosper at whatever we do !
CD: $ 17.50a
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