Well, as they say, it ain't over till the fat lady sings...And she sure sang off tune this afternoon!
My own explanation for the abrupt SWS decline off its new high is two-fold: 1) As has been pointed it, SWS does trade in an over-all market, and so it participated in an over-all abrupt decline. 2) It is the only brokerage firm that has been steaming ahead these past few weeks, even though the industry as a whole (and not just the internet brokers) has been flat. You can only defy the law of gravity of your own sector for so long.
Not being an "internut" myself, I have never had the experience of having a stock I purchased go up so fast, in so short a period of time. (I bought at 27 1/2 earlier this year.) So, out of curiosity, I have been graphing its performance in relation to other brokers (on & off line), and in relation to NITE as well (because, for a while there, SWS and NITE were moving in lockstep).
Interesting. If you look at a performance graph of SWS, NITE, SCH, AMTD, NDB, and JBOH for the past 12 months, SWS's performance looks virtually flat. The big winner for that period of time is/was AMTD.
6-month performance: SWS performance still looks flat, by comparison with the others. For this period, the big winner -- by a mile -- is JBOH.
3-month performance: SWS begins to move, apparently because many investors think of it as a cheap way to cash in on NITE. NITE is No. 1 for this period, and SWS is No. 2.
1-month performance: SWS is way ahead of the rest of the pack, which either have flat performance or declining performance (e.g., NITE). My guess is that investors finally caught in to the fact that SWS was a good investment in itself (not just as a proxy for NITE), and that it was cheaper than the competition.
From all of which I conclude, mfgrep, that although you have a perfect right to "want to see the 60's again" so that you "can load back up", I think you are wrong to want that (and not just because I still own SWS). Why"
1) If it goes down, while the other internet brokerages stay flat or go up, even if only by a little, then that will mean that investors no longer consider SWS a bargain compared to the others. Hence it is bound to lose steam PERMANENTLY.
2) If it goes down along with the rest of the internet brokerages, then that will mean that there is a rotation out of the industry. So even if you get SWS at a lower price, you may have to wait a good long time before you make your expected bundle.
3) Everybody loves a winner. When a winner becomes a loser, it takes a while to acquire that charismatic shine again.
What I would like to see, frankly, is SWS' behaving from now on like a NORMAL brokerage stock (which in fact it is). The ride up has filled my coffers very nicely, but I am getting dizzy, and I do not trust habitual internet investors. They are what is volatile; it is not the stocks themselves. A nice little, steady little, upward trend would satisfy me. Enough of these whing-whangs!
jbe |
