Best prediction
To make good predictions (on any science, including stocks' prices) we all look at the past in search of patterns. That's why we have charts and technical analysis. However, with regard to Internet stocks' behavior I found a very interesting and, probably revealing, pattern in the opinion of investors. That pattern (specially for the winners) is not in the charts, but on the message boards.
I encourage you all, for example, to go back and look at the messages posted on EBAY board last October - at the time the stock was $30 pre split and many traders wanted to short it. Since then the stock has rallied 1,460 %. You can find same sort of opinions in most messages posted on AMZN board a year ago - has rallied 1,400 %. Same apply to YHOO, XCIT, ATHM, NTBK, TBFC, RNWK, BCST, SPLN, EGRP, AMTD, SIEB, etc.
Whatever reasons investors may have had to believe this stocks are overvalued, no matter how right their analysis may look, the fact is that they had gone up and up. And the button line is that we all are here not to make a point, but to make money.
For every one trader that made money shorting internet stocks, there were hundreds that lost it all. For every one that made money on the short side, there were dozens that made many times more on the long side. |
