To: Ed Pittman who wrote (6499 ) 6/3/1998 9:50:00 PM From: Bernie Diamond Read Replies (2) | Respond to
Ed, I don't see equal risk/reward on N. For N to hit 15 or so, would require an unbelievable bad news quarterly report (i.e., Arnie's negative EBITA not coming down; surprising low new sub adds). I think a lot of N's decline has to do with the kind of TA you and others follow. TA, to my mind, is a measure of collective psychology at any point in time. It can't be ignored because people act on it, and therefore impacts the price of a stock/sector/market positively or negatively - hence the phrase, "Don't fight the trend." We are in a definite down trend, people don't understand what is happening, or why, and don't know what to do. Average down? Sell? Hold? Finally, each individual must make a personal (emotional) decision. Can I afford to hold/wait? How much time do I give this puppy? Etc. In my case, I'm fortunate that I can afford to wait it out and I can go to sleep at night AND I firmly believe in this companies fundamentals and its management. MS target price of $38 by the end of the year is not IMO fantasy. It's realistic and depending on the next several quarters, may be a ridiculously low estimate (in hindsight) this December. I don't love N - I love its fundamentals and what it WILL do with its sustainable competitive advantage.
