Re: Value vs. momentum investing
Essentially, your argument against Phoenix is that the stock market is event-driven and there aren't any events that will drive the price up.
The earnings release generated some excitement and the price rose to 16 3/4. Last Thursday the trading volume was only 20,000 shares, so I think a minor transaction could move the price a lot (up or down).
The major event is the resumption of share buy-backs in April. So, your money might be dead for 2 months. But, all it takes is one small fund manager (or even a wealthy individual) to disagree with you to get the momentum snowball rolling in the meantime.
Congratulations on your Intel investment. After that runup, it took a lot of courage to hold on for more. I'm more conservative, so I often miss those runups. I looked at my transactions list recently and came to the conclusion that the majority of the stocks I sold for a profit of 20-100% are up even higher today (Intel, LSI, S3, Seagate, IBM, shorts in SystemSoft and Netscape).
I think the market is vulnerable to a downturn. Jan. tends to be a good month and Feb. is often bad. Phoenix has a lot of support at 15, so I think it's a good port to ride out a storm. I'd rather have dead money than watch my portfolio erode, so I sold my shares of AMD yesterday, too.
I don't worry about a 2% downturn. I was down 25% on my shorts in SystemSoft and Netscape, but I still pulled off 30% profits in less than 3 months. |
