Helooooo! Anybody here??? Hellllooooooo!
Just because I leave, doesn't mean everybody else has to as well.
On Jan 28, I wrote post #7070, wherein I wrote:
<<I emphasize *long term*. Many who have a much shorter time horizon will consider it best to sell rather than risk a "dead-money" effect. Remember, for them, it is not a question of a few points off the bottom - they are looking for a rocket. There are other stocks out there. However, if you are very patient, you will be well rewarded.>>
Well, on that day, Jan 28, the stock closed at 32 3/16. Today, it sits at 31 1/2. As I said at the time - for short termers it is not a question of a few points off the bottom, but rather the fear of "dead money". I came in for some skepticism, but here we are - and after bouncing up those mentioned few points, NITE is back below 32 - pretty dead money for the *non-trader*.
And don't let anyone tell you it is all because of the sector. Several OLBs were up Friday, some sharply (DIR up by 9%). Today, again several were up. One thing remains consistent though - NITE is down. That's out of the last 7 trading sessions, NITE is down 6 times. Markets positive or negative.
KP talks about NITE transitioning from momentum to value invetors. He mentioned dropping volume. He said it was all good.
I've been trading for years. Have you guys heard this old saying - volume precedes price? Low volume - low price. Yes, the volume sure has been low.
Now, let us think for a second. NITE is at a p/e of 22 or so. According to KP, it is transitioning into a value stock. Let us think - what kind of stocks does a VALUE investor buy? Does he buy expensive stocks, or cheap ones? The value investors I know, are skinflints. They like to buy CHEAP. Low p/e. I guess that is why the volume is dropping - momentum players are gone, and the value investors will not buy until it is cheap. I guess that is what KP meant by "the stock is transitioning".
A financial stock - and this is how NITE is now perceived, thanks to KP - usually has a p/e of anywhere between 7-25. Sure, there financial/brokerage stocks like DIR at 144, etc., but those are not "value", and that's not "good" according to KP. No, KP is positioning NITE as a value play.
Now, if a fin. stock p/e is between 7-25, then if we go toward the lower end, like 10-15, that would be "value", while 25, or 22, is a little dear. When NITE is at 22, KP tells us that the stock is transitioning to "value". I guess that means it is not going UP the ladder from 22 to 25, 28 etc., but DOWN the ladder, closer to 10-15.
In time, with copious earnings, tons and tons of it, NITE will gradually go up in shareprice and still be able to maintain a nice "value" p/e of 10-15 that so pleases KP. So, long term, loooooooong term NITE holders should do really well, long term.
Might it happen that NITE sharply rockets upwards like last year? Not if KP can help it! That would be the bad "momentum" players again. Can't have that. Still, can it happen? If it does, it will be against KP's wishes, because momentum investors are not "good". So, KP will probably try to keep a lid on such horrible events - expect more of the silent PR treatment (PR at NITE is a contradiction in terms), more cold-water remarks from KP, maybe a few patented shareholder-unfriendly moves like NITE pulled off last year.
But worry not - meanwhile the business is just getting better and better and better. Whoa, you should be sooo grateful! Now, don't expect to see any reward in your shareprice - or more precisely, yes, go ahead and expect it, but the "value" kind, the kind that keeps the p/e firmly under control. After whopping good quarters, you'll gain 1/64 (or maybe after decimilization, an extra penny for your patience - there, and be grateful).
Yes, I screamed last summer about the tragedy that was unfolding, I kept warning that NITE might get stuck with a low p/e. I guess it all makes sense now. KP wants to position NITE as a "value" stock, and that BY DEFINITION does not include a high p/e.
Well, at least he gets to diversify - into stocks that are maybe less "value", but are an actual asset in a portfolio instead of a vampire.
In any case, LONG term investors will do well (how long have we played this tune now?), so those who are patient will be rewarded - at the very least, spiritually. For isn't it a good lesson to learn, that money isn't everything? NITE should be a good teacher.
Anyhow, I posted here because it seems the board has died. It is a kind of "mouth to mouth" resuscitation. Now in response, there can follow the usual denunciations, hollering and insults. My job done - I leave again.
Morgan
PS At the next shareholders meeting, maybe NITE shareholders can get to make some money - they should ask Kenny which stocks he is "diversifying" into. After all, the guy has such good sense of opportunity - look at his last to sells at $44 and $45! |
