Hi Paul. Well, I will write this 5 minutes before the opening... when it still looks to me like FLEX is going to have another good day.
Thanks for trying to help me. I hadn't considered a paired trade,nor using call options. Probably too sophisticated for me.
As we know, the selling decision or decisions are much more difficult than the buy decisions. Right now, I think my posts reflect some of my own angst in not having a larger position in FLEX. (This is always the case with someone who has a diversified portfolio and is mostly unmargined.)
I will argue FLEX as a 30% grower and deliverer of bottom line results of corresponding high earnings gains. But, for now, assuming you are right -- why not... you've been very right all along in your analysis-- I'll assume FLEX meets the rev and earnings and pe multiples you are predicting.
Someone who bought FLEX at the high last year (Oct) is now sitting on a good gain. That is so. As I look at the 13 month history of the stock, I see that that person has a break-even or profit in about 3 of those 13 months. On the other hand, if someone wanted to buy the stock at about 38, that person had a chance to buy it at 38 in all months except April, May and November (this month). (Small print on my graph - I think I am reading it correctly.)
I am trimming a position -- not selling it out. So I certainly hope the stock goes to 70 by January. And it looks like it could very well happen - the momentum is there. I am saying - I think -g--- that there's been a heck of a lot of months when anybody could've bought this stock at 38 or below, and I think those months will return. Maybe the outlook for FLEX, the business, has got better and better over the year. On the other hand, the stock price fluctuates based on a lot of variables - Asia, Fed, Marks. So it wouldn't surprise me either to see the stock selling at 50 in January (or 38 or 78 -g-). And if it does retrace - as it has several times in '98 - then I want to be in a ready-state to evaluate if I want to add to my position.
Paul Senior.
Congrats again Paul on a fabulous call and having the guts to stick with it.
(I recall you saying you were heavily margined, so I know there must have been some trying times a few months ago.) |
