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 : Full Disclosure Trading -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (6617)	8/6/2003 3:52:45 PM
From: Sam Citron	Respond to of 13403

OT ** catching falling knives too early I agree, having made the same mistake myself many times. The downward momentum tends to continue for a few days, at least. I think some of the reasons are: (1) It takes some time for markets to fully digest news as many institutions tend to reduce positions gradually over a course of days or weeks, rather than all at once, due perhaps to fear of creating order imbalances; (2) As the price drops, it tends to bring out more news stories, which usually have a negative cast as they discuss why investors are selling; (3) It often takes a couple of days for analysts to digest the news and adjust their ratings; (4) Momentum tends to persist once the equilibrium is disturbed, partly due to trend traders. I expect a dead cat bounce no later than Friday. Sam

To: Gottfried who wrote (6617)	8/6/2003 5:41:44 PM
From: Sarmad Y. Hermiz	Read Replies (1) \| Respond to of 13403

OT *** >> mental note NOT to buy on the first day of a large drop. Today is the second day. Gottfried, In the case of Western Digital even 10 days or 20 days seem insufficient. Though after 6 years, the stock appears to be bottoming. I think tomorrow will be the turn. Sarmad

To: Gottfried who wrote (6617)	8/7/2003 6:19:22 PM
From: Sam Citron	Read Replies (1) \| Respond to of 13403

OT ** If it rarely pays to ST buy on the day of a large drop in price, then it must be true that it usually pays to ST sell on such days. Right now, there is an ongoing case study in XMSR, whose shares have dropped 20% today. Bulls, including Merrill Lynch, say that investors are overreacting to concerns about insurance recovery for a Boeing 702 satellite whose solar arrays are degrading at a rate higher than expected. Although I have not heard it expressed in any thread, I think the bear case may be that if such satellite anomolies persist XMSR will need to launch more birds (and spares) more frequently and this will be an ongoing source of cost increases in the future as the nascent satellite industry struggles to achieve breakeven status on a cashflow basis. Already XMSR has had to increase depreciation expenses for its satellites as it has decreased their expected life from 17.5 years to 6.75 years. I'd be interested in hearing other traders' experiences with trading stock on the day of a large drop in price. Is it worthwhile or not? Sam