RE: When to lose sleep
Sheila,
>Tom, I briefly read most of this PM's post. Some posters fear
>Syquest, Orb etc. As you previously stated they are not worth
>loosing [sic] sleep over. Since I can't be at my computer all
>day to trade I have to be satisfied with buy and hold. Well
>I can't be greedy either. The momentum is up so what can I
>say...
Right on all counts. There's no need to lose sleep over
all the potential competitors. We've been through this
same cycle of worry and doubt dozens of times before,
actually. Nonetheless, you probably shouldn't ignore
them completely, either. Just keep an eye on this thread.
We've collectively monitored each new product as it has
appeared, or failed to appear, and that will continue.
If the Orb does make an appearance, the thread will be
filled with sightings, channel checks of quantity and
price, and so on, and you'll know before the first
quarterly filing that takes such an entrant into account
that something is up. Some day, probably in the very,
very distant future, the Jaz and even the Zip will get
hit. It's inevitable. It won't happen overnight, though,
only over a period of months. Here's where you'll find
out first. This thread has a stellar track record for
getting these things right. The print media don't. The
thing to watch for is announcements from the technically
savvy longs with a good track record of postings that
they're finally really worried about some new competition
and, just to be safe, they're going to go to the sidelines
for a while and see what happens. Dale Stempson did that
with the Nomai lawsuit. Not too many followed him, but if
enough did, then I'd have worried much more than I did.
If, say, Allen Murdock said he was bailing because of
the Orb, and he gave good technical reasons why, then
I'd be sure to have my broker's phone number handy just
in case. If misfortune befalls Iomega, in other words,
a lot of us here will jump out of the high-flying Iomega
airplane holding hands. Just make sure your parachute
is properly prepared and securely fastened. <g> And,
of course, you must earn your keep by donating a little
of your time by visiting your local computer stores and
reporting what you see. (Note that I'm not necessarily
recommending that you also participate in the Gary
Wisdom Memorial Reshelving Gambit. <g>)
Regarding the momentum, today was exhilarating, to be sure,
but this is nothing compared to spring 1996. Iomega can
be a wild, wild ride indeed. If Carlton Lutts picks it
up again, or something similar, you'll see a dizzying
run-up. I doubt that there'll be a repeat of the 1996
spike, but hey, you never know. One thing is sure, though,
and that is that every momentum run-up is followed, some
day, by a corresponding downward slide back to reality.
If the PE gets too nutty, e.g. over a hundred, expect a dive.
The _only_ thing that cushions such slides, keeping them
from becoming crashes, is solid earnings growth. I'm
pretty sure there'll be profit-taking tomorrow, which'll
push the price back down, and IOM may even drop back
below 30 again for a while. But the earnings growth is
quickly catching up with the current valuation, so the
tumble won't be very hard (if it is, load up!) and it
won't last very long.
You could actually be greedier if you wanted to, even with
the minor distraction of having to go to the office and
save lives during the day, of course. The trick is to do
what those with "trading shares" do, namely, to hold onto
a core group of long-term shares, but to buy and sell an
extra batch of IOM simply by putting GTC orders on the
buying and selling at what you think are ambitious, but
probably touchable, upper and lower bounds of the current
fluctuations. For example, right now, you could put in an
order to sell your current trading shares for, say, 34, and
an order to buy some trading shares at, say, 28. (These are
very generous bounds, and the shrewder players who are
obviously doing their trades for minimal commissions, and
for smaller percentage gains than this, are using much
tighter limits.) Then you can go off to work and simply
watch each night to see if you've been able to pick up
some shares at what is a bargain price at the moment, or
to sell some shares at what is a premium price at the
moment, and then pocket all the profits from all the little
run-ups on the stock. Essentially, you'll then be making
a little dough every time the stock bounces up and down.
It only works with a volatile stock like this one, which
is being played by shorts, by institutional accumulators,
by day traders of all sorts, by options jockeys, and by
some reasonably stupid individual investors who buy at
the relative peaks and sell in the troughs. I'm too broke
(at the moment) and too chicken (at the moment) to do
this kind of thing. (They don't pay historians,
not even good ones with PhDs, quite as much as they pay
physicians, not even those in countries with socialized
medicine. <g>)
That's my two cents. It's your money, of course. Happy
trading to all. It's sure fun watching all your strategies.
Cheers, Tom (long IOM) |
