OK, I'm back from FLA. It was a lot of fun. Toured the Universal studio. Great rides! My favorite was the Spiderman ride (similar to Back to Future, but a lot more involved and "real"). Given that I am a big roller coaster fan, I'm surprised that I prefered this "virtual roller coaster" to the real ones. Of course I also donated some blood to the wild life reserve's mosquitos. And as luck would have it, there was a beach fest with all the beachly activities you can name at Coco beach. All in all, it was a lot of fun.
Then I came back and had to catch up with 263 emails at work and about 90 emails in my private accounts and of course a couple of hundred unread SI posts and 20+ SI PMs. I read them all, but now I don't remember them all :-/ must be getting old.
GM: There are two differences between position trading and investing. The first has to do with time horizon and all the twisted implications of that. Most professional traders that I know of use 4 days to 4 weeks for a position trade. Mutual funds use 4~8 months for an "investment". Since I have no intention of competing with either one, I use 2~4 months for position trades and 8~18 months for investment. As I have often said, time horizon is the single most important decision you make. Making 20% in one week in an internut is not equal to making 150% in a year. The goal is to optimize the returns for the time span you expect to be holding the stock.
The second difference has to do with the reasons you buy the stock. You do a position trade because you see some short term reasons like the earnings news, stock momentum (i.e TA stuff like breaking out of a trading range), or rapid consolidation in the sector. You invest in the company because you believe in it and you see value there. In case of AMAT during last fall, it should have been very obvious to any investor with time horizon of 2 years, that unless civilization as we know it ends, AMAT will not stay below $18 over the next two years and that in all likelihood it will hit $80 sometime before 2002. So at $24, your down side was 25% and your up side was 300%. Given that the company is strong enough not to go bust or lose major market position (a core requirement for any investment), then all investors should have kept buying AMAT in mid 20s and unless you became aware of fundamental shifts in their business or the market as a whole, or unless AMAT broke through your down side estimate and stayed there for a couple of weeks, then you should have just stayed with it, even as it yo-yoed between mid and low 20s.
Ray: I know all about the multi GB servers. At times I am asked to do capacity planning for various companies. But those E10Ks don't make up for the rest of the computers. Aside from some very high end applications, the only use for those big servers is to lower the costs by shifting the load to the servers from the desk tops. In other words, it costs less to add a few giga bytes on the server than to upgrade every machine. Part of this shift is due to the maintenance savings, but part of it also due to the actual hardware savings. I have rarely seen a machine that need more memory or cpu power. I have however seen a lot of machines that needed better IO and application optimization as well as faster access to the servers.
The nice person whose name I can't remember: Thank you for considering me good enough to be your "AMAT buddy". I have no positions in the stock market right now and I don't see that changing. When I do buy and sell stocks, I rarely need to set weekly targets and watch for them (see above). As such, I must decline your offer.
I have a nagging feeling that I am missing someone here. I am not ignoring anyone on purpose. Feel free to send me a private message or email me at sunstsu@email.com
Sun "can't wait till I go on vacation in July" Tzu |
