This is really off-topic and long, but is in response to Bruce's post:
Bruce, in recent weeks, I have been learning what it's like to be a resident bear on a stock forum, and usually, it isn't much fun. The question of why one would choose to do so with a stock that he states he is neither long nor short is a valid one, but far more for me than you! :-) In the past, it was easy for me to dismiss bearish posts and negative comments about a stock as coming from obvious shorters, competitors, etc.--anyone with an agenda. Now I understand very clearly that it is possible for someone to express an opinion simply to interact with others and to draw out informed responses. This applies especially if the majority of posts seem unrealistic or uninformed about a company's prospects. A good example is the information submitted recently by Marguerite on YAHOO! to counter some of my points, who took the time to do a little research and satisfy herself that the answers from the company were ok by her. Or the gentleman who posted the rationale that Avid is moving away from selling hardware and more towards software only, which is why revenues could decline while profits would go up. Those are smart investors who are doing their homework. I hadn't seen much in the way of informed analysis on that thread in quite a while. And by the way, their arguments were presented without attacking me, in the same way your own post is offering useful information and encouraging discourse.
Re-read some of the Avid posts on YAHOO! a couple of months ago when the stock was in the $40's and you'll see that there were hypsters literally swinging from the chandeliers giddy with the prospect that Avid was soon going to $50 or $60. I actually think that some investors believe this stuff, perhaps not literally, but I think it does create a atmosphere that makes readers feel safe with their choice of stock and they forget about the risks. I think I had at least as good a chance of convincing one individual shareholder that Avid was way overvalued at that point as the momentum cheerleaders had of convincing one that it was going to the moon.
I only follow a handfull of stocks, and on their discussion forums, I may post lengthy opinions if I feel I have something to contribute. Most of the time I just read and listen, especially on stocks with products or services that I don't have firsthand knowledge of. As a former cheerleader of both AVID and MDEA, I do check in from time to time to see where the sentiment is, and I look at the quarterly reports when the numbers come out. Both are great companies with great products, and it's entirely possible that I could turn bullish on either one in the future. But for now, MDEA is mired in R&D expenses and sluggish revenues as it rolls out its Wintel products, while Avid's own revenues don't get me very excited. If either company could show even 10% topline revenue growth, I would look at their valuations more closely to determine whether I'd want to get back in again. But they are both niche companies in an ever-more saturated market with well over 100 competitors which now include Sony, Panasonic, Scitex, etc. So I don't think their growth prospects are nearly as rosey as they were in the past, and may even point to a shrinking slice of the overall pie. All this is happening in a market where computer hardware prices are plummeting, and the cost of entry to the NLE market has dropped to new lows. BTW, I think MDEA has a much better chance of going from $3 1/2 to $7 than AVID has going from $32 to $64.
That was not me on Compuserve (I've never been a member), nor was that me talking about conditional sales of trial systems last year. I'm sorry if you felt my recent posts were gloating at the drop in Avid's price; I think it was a useful fact to bolster my opinion's credibility.
Best of luck to you,
And as always, do your own research!
D. Kuspa |
