The following is a quote from the Fonar thread, another stock I own that is falling on great news. I think the concept also applies to PMSI.
"To: jcboatwright (1051 )
From: David Giacometti
Mar 5 1997 3:57AM EST
Reply #1052 of 1127
Just curious, Fonar just won $103 million dollars plus interest. How did they get shafted? The stock
price is now a gift. If you've placed FONR in your 'do not disturb file' because of the price of the stock,
then you might read Peter Lynch's book "Learn to Earn". He has a section titled, "How to Catch a
Twelve-Bagger". In it, he says:
"If you're going to invest in a stock, you have to know the story. This is where investors get themselves
in trouble. They buy a stock without knowing the story, and they track the stock price, because that's
the only detail they understand. When the price goes up, they think the company is in great shape, but
when the price stalls or goes down, they get bored or they lose faith, so they sell their shares.
Confusing the price with the story is the biggest mistake an investor can make. It causes people to bail
out of stocks during crashes and corrections, when the prices are at their lowest, which they think
means that the companies they own must be in lousy shape. It causes them to miss the chance to buy
more shares when the price is low, but the company is still in terrific shape."
IMHO, Fonar is a great STORY which happens to be undervalued because many people do not yet
KNOW the story. As more people learn the story and the company begins to show more sales and
earnings, the stock price will rise. Companies with great stories and undervalued stock prices are an
investors dream." |
