USAB great bet short and medium term.
Most of us are well aware that big money is in issues which are not going to show a profit for years, if ever. I refer to many of the large cap internet stocks. They are a gamble and most investors in them are banking on the fact that they are the front runners and will eventually have huge profits. But many of them will not even be here by the time it takes to work thru the growth period.
I remember starting my internet experience with Compuserve. I guess they were bought up by someone, but the point is they no longer exist. Many of the big names will not be around in a few years, and the people who are betting on them will hopefully do ok due to buyouts or sell offs in time.
But with USAB, we only have to wait for a few months to see the fruits of this planting. And while we wait, the core business is already profitable. Whatever the new web presence contributes to USAB will be a bonus. I never heard any indication that they were going to risk their profitable core business to do this internet phase. So what can we lose?
I will hold this stock and be expecting news releases which suggest alliances designed to create more profit, such as adds on portal sites. I will expect to see news about new services which will add to the bottom line in the pure banking activity; such as e-commerce credit cards or internet check service with someone like OpenMarket acting as the transaction provider. I will expect to see news about the online trading system (and I wouldn't be surprised to see such an innovative company like USAB offer a level II system of trading). I expect to see news of such a nature which I can not imagine at this point.
With every news item, we will see more people buy up this small float and be prepared to hold it for a long term. People who look at bank stocks are by nature more patient than the average tech short term player. When this float is in strong hands, watch the price rise when new people want some shares upon the next news release and NO ONE is willing to sell.
I would NEVER think of shorting this stock. A large short position would temporarily accelerate the growth, but in the long run, it would be better to have slow and steady growth instead of the violent up and downs brought on by short squeezes and covers.
I would suggest that if you are new to trading, you might consider trying something new on this stock. When you see enough profit that you want to sell, consider selling enough to get your seed money back plus a modest profit, and leave the rest to grow unattended and untouched for at least long term (1 year or more).
If you do this, you will help grow this stock, you will make more money in the long run than in the short run with much less work, you will pay less taxes on your earnings, and you will have the chance to own a major internet company when its stock soars to highs you can not imagine now. Trust me, this is how you can make REAL money as a trader. Short term can be good, but think how you would feel if you took short term profit on AOL or MSFT or UBID. I know how it feels, I did it. And I don't do it anymore.
Good luck. The ideas above are mine only, and you should do your own assessment of risk and returns. |
