I think the nets needed this little pullback. These pullbacks flush out the short-term profit-takers, and give incentive for new money to flow back in.
I'm one of those new investors who has been waiting for a pullback to get back into AOL. I bought in during another "doom and gloom" pullback last year. It worked out very well, but I stupidly took my profits about 100 points too soon.
My dad was a lot smarter than me. He held his AOL, and continues to hold it. His simple criteria is: where do you expect AOL's stock price to be this time next year. 100% is his conservative estimate. He made this same simplistic analysis on YHOO - and bought when everyone thought it was "topped" last summer. He didn't sell during the Sept pullback - he bought more. Another one of his simplistic notions - when it comes to "good" stocks, buy when everyone else is selling. While I've been daytrading for 1-10 points, he's racking up 100-500 point gains.
I you had invested $100,000 into blue-chip internets during the last market pullback, you'd be a millionaire right now. Well, my dad already is a millionaire, with his simplistic notions of the market. Too blind to even see a computer monitor, which he doesn't own in any case. Blind but with more vision than 100 daytraders, or those self-serving talking heads on CNBC ...
AOL will blow out earnings on the 27th, and probably split again. This time I'm listening to that old codger.
SM |
