Jimbo: I'm waiting with my main cash hoard to buy COMPAQ. (I bought some at $43 on Friday and some $43 13/16th today, but sold out throughout the day when I saw the deterioration.) Originally, after I sold at $50 and $48 I thought I would buy back in at $40, with a possibility of $38. The first bounce from $40 was too quick for me, and took me by surprise.
Frankly, I don't know whether to wait for it to test $40. I think there is a good chance that the original scenario will work itself out and that it could go to $38 or even $35, in extremis. But this would require very heavy damage on the NASDAQ and the tech sector of the NYSE. I thought that it was likely that we would get that damage in a selling climax, and I thought that it would be within the next 7-10 days.
To be 30% off its recent high - not an atypical number for tech stocks in serious market sell-offs, CPQ would need to go to about $36.
But I am reconsidering. I am getting a sense that CPQ is beginning to be understood and appreciated by the institutions and gurus - the public will follow. There will be major AV announcements this quarter: very soon we will be slipping into the forward earnings current and receiving new market survey results. CPQ may be dragged down in sympathy with DELL, but I think there are so many people on the sidelines now waiting to get it at a good price, that I think one will have to be nimble to get it at the bottom. I think $43 is a great price for a stock that will be $75+ by year-end. Any price lower than $43 is a gift. People should pick a target price and stick with it, even if it goes lower. Choose $35 or $38 and you may never get it. One can be greedy at the bottom as well as at the top. |
