<Your logic is about what I expect for someone who sees a $122 stock as undervalued after it reports earnings of .26 with gross margins of 37% (this is not MSFT folks).>
Bill,
I certainly can't argue with your valuation model. But who said these valuation models are what historically put money in your pocket?
I've been watching AOL stock on a daily basis for a few years now, along with Dell and Microsoft. And I hear these valuation things every time. Meanwhile, these stocks keep doubling and more every year.
You would have to be incredibly nimble to make money shorting any one of these stocks. Go back and read posts about AOL a split and 60 points ago (you won't have to look for long, maybe a few months).
AOL was then as "ridiculously valued". I think this is more about supply of stock and demand, not traditional valuations.
You like PE's in the low teens? Look at the oil drillers, and you could have looked at disc drive stocks last year, both of which would have cost you a fortune.
Splits don't mean anything? NONSENSE!
If you were to play the splits on Dell, Microsoft, AOL, and yes even Yahoo, you will have made a fortune. and I'm here to say it's happening right before our eyes again with AOL, whether the valuations are palatable to you or not.
I thought the idea here was to make money. Not to try to bend the real world and the market into some dogmatic textbook ideas about what is supposed to happen according to some professor. If you want valuation geniouses, look at the experts at Long Term Capital, I think they had Harvard, MIT degrees and Nobel Laureates....
Talk to you in 6 months, we'll look at the price of AOL and see who was right. And we'll see who has put more money in their wallet! |
