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 : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (21342)	8/31/2000 12:41:39 AM
From: MGV	Respond to of 27311

No Zeev, you fail to address risk in your post. The issue is not what the stock could do IF .... Rather it is also what is the probability of IF. And that is a subjective assessment. If it isn't clear to you, imagine a scenario in which VLNC could be valued at $100 per share w/in 18 months. Plenty would have to go right for that to happen. Impossible? No. Likely? No. Now, Kellett and his imaginary friend, Wolanchuk, might assign a probability of 100% to the scenario. Wexler might think it is 0%. Imagine assigning a probability of 10%. Now imagine another $15 stock that you believe has a 50% chance of appreciating to $45. Which has the higher expected return? Your last response suggests VLNC because, under this example, there exists one scenario in which it could go to $100. The response your last post suggests is wrong. VLNC has swung on sentiment. If you are willing to trade frequently, a speculative stock that moves almost exclusively on sentiment provides an opportunity, depending on your trading skill and luck, to make some money. But based on the stated assumptions of the majority of people who profess undying emotional attachment to VLNC on this message board, trading is not a reasonable option. And even if it were, most would do no better than wolanchuk, who allegedly suggested it would go to $100 by Nov. 1999 and more recently, allegedly suggested it would go to $50 when it was at $40. If so, people suffered substantial losses in reliance on his guesses and flawed probability assignments. Now, you are playing loose with a a small semblance of an analysis when you write, "once that buying comes. there is quite a possibility that VLNC will repeat its move from last November ..." "Quite a possibility," you write. Break it down into its parts. If a conditional event occurs - i.e. "that buying" - then, "quite a possibility." You leave plenty of places for error in your judgement. In the meantime, alternatively, other stocks have risen 20-100% with greater visibility. The risk/return calculation for VLNC does not add up favorably. The question isn't whether one should invest in speculative companies and take risks. The question is whether you are buying the highest possible return for a given level of risk. If you think VLNC offers the best risk/return ratio, then you are betting that everything VLNC has done to date is not a fair indicator of what it is going to do tomorrow. It has been the wrong assessment to date. It almost always is.

To: Zeev Hed who wrote (21342)	8/31/2000 1:06:11 AM
From: MGV	Respond to of 27311

You may look in a rear view mirror, I prefer to reassess risk vs. reward every day. The information available every day is the best indicator for forecasting. Experience aids interpretation. Good companies tend to produce positive surprises. I think you probably have misread more than you think. One other clear error is your assumption of binary results. Your example presumes two states - survival and lack of survival. If it survives, you strangely seem to assume it will outperform the market. There are multiple possible results. It could survive and underperform, which is what it has done consistently with one narrow window exception. To invest in VLNC because you believe the market is discounting survivability (because it has not fallen below 14-16 range), doesn't take you very far.