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.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: djweiland who wrote (24371)	5/9/2000 8:44:00 AM
From: Apollo	Read Replies (1) \| Respond to of 54805

catch a falling knife" a common excuse not to buy when one neglects true valuation metrics. those valuations exist even in gg. if you can make an educated guess as to the bottom, stepping up to the plate becomes statistically a better bet. given the number of smart people on this thread i'm surprised there hasn't been a concerted effort to define these metrics in gg. 15 months ago valuation metrics led me to qcom among others. look to psr, cash and cash equivlents, peg and historical relatives by industry. look to revenue trends and the management team. forget momo and short term earning trends. djw Those are reasonable comments. But I would add that "catch a falling knife" may also refer to buying on a dip, with better valuation metrics, but not at a bottom, when the market proceeds to drop some more. In my own experience, I did this in '97 with Ascend, when all of the networking companies collapsed. I bought on the way down several times, but ran out of cash before the real bottom was reached. In the end, stepping up paid off very well. But I am sure you appreciate that others would argue to wait til the bottom has become more clear, and buy on the way up. Apart from going with the Mo', there is also the possibility that the entry price on the way up will be less than in entering on the way down. I'm not advocating on when to buy or what to do. I'm just pointing out that Globalstar traded for the last half of '99 between about $25-45. Buying earlier this year when it was down to $15-18 must have looked very attractive; yet it bottomed in the single digits. Hence, "catch a falling knife". stan