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Technology Stocks : 3DFX -- Ignore unavailable to you. Want to Upgrade?

To: UCLAlumnus who wrote (5710)	7/23/1998 3:19:00 PM
From: Sun Tzu	Read Replies (3) \| Respond to of 16960

Wait for this stock to take favor in several months then get out while the gettin's good. Eh...m So you are suggesting holding/buying something that is falling, but selling whatever is going up? I sure as hell wish TDFX was soaring towards 30s now, but it isn't and it will take considerable buying pressure to change that momentum. And buying power of TDFX enthusiasts (myself included) has sadly been diminishing since last Q. Here is a question (and I know I am touching a tender spot right now, but do be patient) What do you think is the fair value for TDFX? Where do you think it may be in a year or two from now? If it is substantially higher than $16 (I think it is) then why would you not sell it to cut down on your stress and then get back in when the trend is established? Sure you may loose the first 5 or 10 points, but if it is going to go to $70 in 18 months, you will still have another 40 or 50 points to catch (and happily average up) to make up for all the losses (and the losses can be claimed for a tax break anyways). If you don't think that it is going to go much higher than 20 then go ahead and trade it if you want, but don't hold on to it with a death grip. Here is somethings to keep in mind to keep you balanced when making an enthusiastic investment decision. These are true of whatever the company you decide to buy so don't take it as a negative comment on TDFX. 1) Risk is always certain, reward is not. So invariably somethings will move against you despite your best efforts (if you knew it would go down you wouldn't buy it in the first place). So ask yourself How bad can it really get and imagine it getting worse because some of your investments will. 2) All investments compete with one another (investments are not limited to Wall St.) So it is not enough to break even or make a little money; you should be (but not necessarily will be) rewarded for the opportunity cost of the money as well as the risk premium. Is there a better choice for the money? 3) Trend is your friend. Even if you are right, it may take the market a long time (sometimes never) to see it your way, and by the time it does, the overall conditions may have changed substantially and you may be way in over your head. So don't fight the trend even if you are not a trader type. As yourself who will buy (sell) the stock in the current situation, how much will they buy and why. 4) In those rare cases that you do have found a sure thing, keep in mind that you will never know everything about the stock (despite what effecient market theorists may say) and it may go down due to factors completely out of your hand/scope such as, recession, foriegn exchange rates, international conflicts (China devaluing currency, Fed raising the rates, sector downturns...) So don't bet the farm on anything, especially a young high-tech company in a highly competetive and cyclical industry. Best of luck Sun Tzu PS For those with short memories, I am not short TDFX (though I sure like to hear the logic of those who are). Nor am I a day trader type. My invesment style lends itself to positions of 2 months to 2 years, and I like to be hedged (one of the things that has sort of softened the blow for me, was that I was long TDFX and ATY.TO and short SIII and TDDDF).