Jim,
That article also implied that CSCC tanked, in part, because some fund managers liquidated holdings out of anger and revenge for being treated unfairly by CSCC's CFO. Gives new meaning to the expression "punishing a stock." For CSCC watchers, it also suggests that management has destroyed its institutional credibility and so the stock may not really recover until they fire the CFO. I don't know exactly when the Fortune article came out, but I also assume that it will trigger big shareholder suits. Although CSCC management denies the story, Fortune named names and would not go with such a story unverified. Despite what some may think they are not the "Weekly World News."
I like your idea of characterizing stocks by their components of momentum, trend and so on. It seems that this approach could work for both long and short term analysis.
I'd like to ask a na‹ve question on short term analysis. At the moment, a lot of people think there'll be a short term bounce in COMPX because it's "oversold." At this point, technical indicators read oversold-but they would after any sizable decline. To me it seems like people are using an inductive analysis-this pattern has often occurred before and their intuition is that a bounce is therefore likely. Now, this could be the usual dip, an intermediate point in a larger correction or even a market break. Are there indicators to distinguish these possibilities? I know that volume can be important in confirming movement, also some like to look at futures or the DJ Transports. To put it a bit differently, what indicators do not read oversold at this time?
An unloved stock to add to the list is WX, IMO. It's been low this week. I'll maybe add to my position. The maybe is that WX is the Barron's cover story this week and will surely pop on it. TV ratings are invariably cyclical-hit shows become long-of-tooth and go away. For example, NBC will have a big ratings hole to fill when "Seinfeld" goes off after next year. CBS is a good asset for WX, but WX hasn't been getting much credit for it. If Ted Turner had bought CBS for the price WX did, the media would be calling him a genius. Michael Jordan they call a fool.
Long term WX will do quite well as a value (the industrial assets are also turning around)play-and it is quite unloved.
Lyle |
