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 : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (44852)	1/7/2001 4:49:40 PM
From: Kanetsu	Respond to of 57584

OK, I'll give Spirit the benefit of the doubt, often times people do refer to stocks being down 150% or whatever, that always amuses me. Allow me to play Devil's advocate as I enjoy it so... <CSCO at 90 times earnings is sure more attractive than it was at 400 times earnings, no?> Yes, this is true, but buying CSCO at 60 was better than buying it at 80, but that still does not mean 60 was a good buy, no? I understand that p/e's will contract as growth is demonstrated by earnings, the question is how much growth can we expect in a slowing economy. Turns out people were wrong in their projections for PC growth and look what happened to those former high fliers like Dell. Another problem in stocks with high growth is that areas of high growth invariably attract competition. <And of course Buffet has much wisdom on long-term buy & hold strategy. But we are mostly here to discuss various strategies, mostly regarding tech stocks and other riskier types of short-term plays.> First, I believe Buffet's wisdom extends beyond "long term buy and hold strategies," and, imo, it certainly can be applied to strategies discussed on this board. Many think techs are a bargain here because they are down so much, I'm urging people to consider that they are not a bargain. Just as I don't consider many of Spirit's picks "value plays." I certainly don't think LU is a value, it looks more like the reincarnation of XRX to me. Second, the focus of this board may be for short-term, high risk strategies, and occasionally there are some good ones presented here I suppose, but shouldn't the focus also be to preserve and grow capital. I'm not sure "short term, high risk strategies" is complimentary to that purpose, no matter how skillful one is at it. After all, a horse who can count to ten is a hell of a horse, but it doesn't mean the horse is a good mathematician. My point is that maybe, to use a cliche I can't stand, it's time to think outside the box and start looking for stocks that may not have 4 letter symbols, or consider other strategies than buying techs each time they go down. A strategy I like to use is "market neutral" where you go long and short an equal $ value of 2 stocks. For example, I remember when ToysRUs was worth less than Etoys and thinking that was crazy. I went short etoys and long ToysRus. Problem is I covered way too early, but it was still a good strategy, and it did not depend on the general market rising or falling. Market neutral strategies can pit sectors against each other or two stocks in the same sector. A trade I am considering now is long FIRE short SEBL. They are in similar spaces, but FIRE has a price to sales of 3, while sebl's is over 20. I just have to figure out when the lock-up expires on FIRE first, but you get the gist. I hereby solicit suggestions for market neutral strategies... Sorry to see the Titans lose, that Ray Lewis is a one man wrecking crew, and so was Al Del Greco...