Frank, it's not fun to watch these internuts go up while AOL sits there. Even though AOL's consolidation does not bother me, it is normal to feel left out when you see other similar stocks zooming up. Today I bought a few shares of YHOO and AMZN as a psychological pacifier. Not enough to make any difference to my portfolio, but if they keep going up I will be happy, and if (when) they crash I will not be wiped out. I am not that much of a gambler, not lately anyway, having been burned too many times on high flyers. I am mainly invested in AOL, along with ATHM, MSFT, comm stocks, and a few high rollers. Hey, check out DISH, I added to that position today.
AMZN, EBAY, and YHOO are moving from momentum, fed by day traders, short covering, and gamblers. Most of this crowd left AOL when it became an index stock.
As far as the S&P, a lot of people have spoken about whether the index funds have bought all their holdings or not, etc. One thing that has not been discussed is that with a stock on the index, these index funds must keep buying and buying steadily, driven by paydays! In other words, 401, 403, and other company retirement plans usually set aside a percentage of salary for the employee to invest, and that is invested each payday. So there are billions of dollars flowing into these funds, and a large percentage is targeted to index funds, which must keep buying AOL in a proportionate amount to their weighting on the index. So in mid-January, expect another huge amount of buying to come in, not all at once, but spread out over the rest of the month.
Talk to me at the end of the month. If we are not significantly higher, I will eat my hat, except I don't wear one :-) |
