Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Randy Ellingson who wrote (86328)	12/6/1999 12:42:00 PM
From: Eric Wells	Respond to of 164684

when do you buy the stock? Obviously when it is at the price that you are willing to pay for it. I believe in Microsoft as a company - and I own some Microsoft stock. If Microsoft were to jump to 250 tomorrow on no news, I would not buy it at that price - in fact, I would sell all my Microsoft stock - even though I consider it a long term hold. I would sell, because I would feel the stock is greatly overvalued at 250. The market is always right in the sense that stocks always sell at a price that investors are willing to pay for them. However, I feel a stock price must adequately reflect the profit-making potential of the company it represents - and I believe that stock prices over the long term do adequately reflect this. However, in the short term, investors may have differing views of the profit making potential of companies. And sometimes these views may differ greatly. For example, there are some investors that believe that Amazon has a very strong profit making potential - there are others (myself included) that feel Amazon's potential is very weak. And there are some investors that could care less about Amazon's profit making potential and buy the stock because there is a lot of momentum behind it. I believe in our current market there are a lot of investors that have overly-optimistic views of the profit making potential of many internet and b2b companies, and that there are many investors that are investing on momentum. I could certainly be wrong - but if prices have been driven higher by overly-optimistic views of the future, then at some point the future is likely to catch up with the market, and prices will come down. I don't mind holding stock of a company in which I believe even as it's price falls. However, if I believe there is a risk that a holding of mine may experience a significant decline, I may take action to prevent a significant loss - whether it be selling the holding or establishing a hedge. Your preference may be to never establish a hedge - to not sacrifice further potential profits to protect existing profits. I feel however, that there are conditions where a hedge or even selling may be appropriate. I've made a lot of money buying and holding long term. I've also saved myself from significant losses by selling stocks that I initially bought as long term holds. As I've stated previously, I won't buy a stock unless I believe in the company. And if I own stock in a company I no longer believe in - I'll sell it. Since we seem to repeating the same things over and over again in our posts (or, at least, I am), I'll make this my last post on the issue. Thanks for the spirited debate. -Eric