Billsig: I normally don't respond to these types of posts but yours is compelling for some reason.
I cannot speak for everyone here, but as for myself and my thread, we are traders first and foremost....investors last. Investments have a right and defined place in anyone's portfolio just as I believe a trading position does as well.
This isn't about valuation and never has been. Look at any of the big Inets, especially Amazon. They lose $2-$4 per book shipped out and they typically have the same view as all other fledgling startups especially in the internet:
"Sure we are losing $2-$4 per book but we expect to make it up in
volume".
This inet movement again, has never been about compelling valuation. It is about a new frontier, a new method of stock transacting (Internet) and hype....pure and simple. Half of the time I trade a stock, I don't even know what the full name of the company is. Some see this as a "bad for the industry" but to not take advantage of current market condtions is to not eat food on the table when you are starving .... it just doesn't make sense.
I don't pretend to understand the outrageous valuations (and I use the term loosely) with most of the Inets, but I long ago stopped trying to figure it out and instead, started looking at what moved them, both up and down.
What moves them up: Hype, expectation and mostly...and unfolding story. What causes them to drop: An end to the mystery and mystique. Buy the rumor, sell the news trading....plain and simple.
The fall of DBCC and BAMM are classic but you only are speaking about the fall....how about being in on the way up, like BAMM at 5 or DBCC at 5.... how about SKYM, or ONSL, GCTY, CMGI, BCST, ... the list goes on.
You must learn the difference between trading and investing and get out of the valuation loop. I know it is tough, I have been there and still shake my head when it happens like today with PRFM.
There are things that can be done to limit risk. I normally, now, do not trade issues with lots over 3000 shares unless there is a compelling story....this limits loss and still leaves plenty of upside. Cut your losses if it turns and look for the next play.
Remember, traders .... not investors. Investors care about 5 yr. EPS, growth and good multiples. Traders care about hype and volume.
See it for what it is..... yet another great opportunity. And the way it is unfolding along with the timing .... it leads right into the next great opportunity, NAVR. Don't miss it.
Luck to you.
TJ |
