RE Q Pessimism,
Most of you have probably read or are aware of Philip Fischers' great book "Common Stocks and UnCommon Profits". In this book he attempts to detail his methodology for identifying outstanding investment opportunities and purchasing shares. There is a chapter entitled "When to Buy".I don't have the book with me but I'll do my best.
A company with great potential goes public. This co has spent years working on and developing an idea or technology. Often this technology is a byproduct of military or academic research.If Wall St. notices at all it gets very excited. This is a "revolutionary" technology that will change the known world. Unbridled optimism takes over. The stock skyrockets, price far outstripping fundamentals.
In the real world, where the company acts out its' daily life, things evolve more slowly. The co continues to invest in its future, often doing things that do not immediately maximize the bottom line. It is a young, inexeperienced co so it also makes mistakes, ESPECIALLY in manufacturing. The share price languishes. Investors leave for greener pastures. At the very moment when the companies' prospects have never been better,Wall ST. loses patience.According to Fischer, this is "When TO Buy".
This sounds like the perfect characterization of our beloved Q.Are we about to or have we already reached this perfect moment?
Fischer is also a big believer in scuttlebutt, although I don't have any idea what he thinks of the type of info gleaned from SI for example.
Lately I've been with dougjn on this.Not having to worry about how to invest 2.6bil of others money a la Gregg, I've decided I just can't take the rollercoaster ride anymore, and that if I miss the first 10 points so what, I can jump on at any time.This is the power of the push button, video game,momentum mkt psych.IMO this aspect of modern electronic mkts may not change, regardless of macro climate. It may be a function of technology, after all chumps like myself could hardly have been participants in the past..
In normal times,the rate at which QCOM stock has appreciated would have been more than acceptable, especially if one was wise or fortunate enough to have gotten in during the early years. I'm one of those who left for greener pastures after the last earnings report, and have done far better with the funds than I would have had I stayed.I too own some Nokia shares,even though I think Tero is out of his mind on these standards/IPR issues,however I think this GREAT Q BUY OPP may be at hand. I'm following VERY CLOSELY.There must be many like myself, in and out of the institutional world.If it becomes clear that the manufacturing issues have been resolved, and that Q can compete on the merits of their products as well as their technology, then it's off to the races.
Once again,Is this now the GREAT AND LAST GREAT BUY OPP, or is this moment still ahead of us? Seems that many of you are afraid of a big panic induced selloff, although I think we're already witnessing this event, one stock at a time, several per week.PMTC, AFCI, MANU, SMOD.Owning to much of the wrong company can be devastating. I suppose it will get pretty scary when MSFT, LU,DELL,CSCO or some such luminary warns or provides "improper,incorrect, honest" guidance.On the other hand, fear of irrational exuberance has been very costly for the last few years. I certainly have paid the price.I'm with Maurice on this one...printing,printing,Liquidity,liquidity,liquidity, although I think one has to be prepared for the inevitable reversal of macro economic winds, rising commodity prices, falling dollar, rising US rates to accomodate a resurgent budget deficit. Smart guys like Jimmy Rodgers are buying commodities and selling dollars.Some companies will do fine, especially if they are at the center of a global technological revolution.Maybe people who are buying DELL and LU at these levels really aren't so stupid, even though as Buffet says there' little or no margin of safety.Perhaps safety is not something that will be highly rewarded in this rapidly evolving global economy/mktplace.Maybe vision and competence, the ability to capitalize on opportunity is more important that safety, although the mktcap of drug and consumer co's certainly belies this assertion.And I certainly am not a buyer of AMZN, YHOO etc at these prices...OT How about Leaps Puts?...
Anyway, I'm over my limit...Patiently waiting, optimistic,but opportunistically on the sidelines.
dave |
