Happy Girl,
A few more thoughts/responses:
"I must say this is SO unlike ISFPs.....to carry a discussion this far."
I've always believed that a discussion should be carried on as long as either side is learning something, and if both sides are, so much the better. Sorry to be behaving against typecast, but as you know I enjoy it when the psychologists have trouble labelling me.
"YHOO a belief and a momentum play. Hmmm..then I'm a momentum player for short term and *true believer* for the long term. Hence my in and out of stock. I jump into the bandwagon when the spike is imminent and jump out during quiet periods. What would you classify me as ? Note that I don't run after AMZN (TGLO is the only skeleton in my cupboard). Do the true believers stay even in the face of a 50% correction ? I wouldn't."
I would also classify you as a hybrid of a belief and momentum player. The trouble with extreme and persistent momentum, especially when it is unsupported by current or even predicted fundamentals, is that the momentum begets belief, which begets momentum, and so on, and before you know it you're over 100 times sales and the company can't catch up to the fundamentals in the next ten years. I am convinced that you are right that in the short term, and maybe a little longer, the fundamentals are meaningless in this context. But I cling to my belief -- please allow me that, it's all I have left! -- that in the end the fundamentals will begin to matter again for YHOO and the other Internet stocks. That is where being this far ahead of them matters. It will be very difficult for YHOO to gain the kind of institutional following that MSFT, INTC, CSCO and GE currently have (even AOL to a lesser extent, although its fundamentals are hampering it as well in that area) as long as it is this far ahead of fundamental benchmark measurements. And without those fundamental-bound institutions on board, a quarter or half billion dollar market cap is going to be real tough. (Recall my posts on the YHOO thread about the fact that repeating YHOO's past 24 month stock performance will result in an unprecedented half-billion market cap -- hence my cautions that although this is a fine company the returns can't continue and may evaporate altogether. And those calculations were based on a price below 200).
"Does it mean you changed your mind, or did I, or did both "learn along the way" ?"
Yes, I think so, and yes -- hence the willingness to continue the discussion this long.
"Yes, institutional investors will monitor the risks well and are a big concern...and yes, irrationality cannot be rationalised beyond a certain point. Thats why price MUST plateau, which I think it will - within 250-350 range <sorry - cant do better than that >>. What are your views ? Do you believe it could crash one day to 150 ? "
I hesitate to predict short-term movements because: (1) I've never seen a valid way of doing it; and (2) I'm real bad at it. But long-term predictions I'm more comfortable with, and I think long-term, YHOO will settle in at between 110 and 220 for a fairly long time, and then go up if the company's promise proves justified. Short-term, though, it could go *much* higher than even 220; emotions are hard to predict, especially for us introverted logical types.
"When you quote historic incidents re: fundamentals - are they as relevant ? Are you talking about instances where a paradigm shift was involved ? Could you please quote examples/references so I can understand better ?"
I am currently researching some examples and will post them when finished -- it may be a few weeks due to holiday commitments. But my general recollection of the history I do know is that so-called paradigm shifts still do not justify what we are seeing here. I suspect that this is a paradigm shift in two interrelated ways, and that is what has caused this extreme valuation surge. First, the shift to the Internet has begun more rapidly than previous shifts -- nothing else has taken off this quickly before that I'm aware of. Second, individual stock investment itself is one of the early uses being most quickly adapted to the Internet. So what we have is a paradigm shift in the way equities are traded happening within a broader paradigm shift in the way information and commerce and all sorts of other things are conducted. Long term I think it is only that broader shift that matters for YHOO; the first one will play itself out as investors adapt to the new medium and discover that there's thousands of other things besides Net stocks or even tech stocks to invest in. But that's JMHO; paradigm shifts are notoriously hard to predict or even see while they are about to happen or happening; afterwards you can write books about how obvious it all was.
"I would not exit longterm though. What about you ? Do you really want to spend so much time here,know so much about the movements and sentiments without getting into it ? You've revised your target from 110 you say - I presume thats 150. Will you now revise it to 185 ? Why didn't you buy it when it was 150, or 185 ? You know, I chased DELL like this - I'd put limit orders at 62, when it was at 65 etc. Eventually, I threw caution to the wind and bough it @50(post split ;(, I bought more @55, bought more @65. By the time I had a desirable portfolio - it had matured ! Its still my core holding and I wouldn't sell it for anything, but the growth opportunity is gone ! Taught me a lesson - if you want something - go for it ! In the long run, you wont be sorry. You may, however, be sorry if you wait too long. Works in real life, works in investments. You know, you might buy 1 share, then 1 more, then 1 more. If it tanks by 50% - well, you lose some change. If it takes off, you could have a paid weekend @ the nearest resort !"
It will not surprise you that I have done the same thing -- chased a stock I thought was overvalued as it went up. One of the first stock orders I placed was for KO at 42 (one or two splits ago, I've blocked it out). KO was at 44 then, and stayed in the mid-40's for two months before beginning its ascent. I left my order in for about two years before cancelling it in embarrassment. And you know what? I never bought the stock, because it was "overvalued." That is why I am continuing this discussion for so long; I want to understand why I dig in my heels like that (I did it again here with YHOO) and when and how to change that behavior to make myself a better investor. Right now, I still see 150 as a logical entry point. But I am toying with buying a little at a time on the way down (or even up if that happens). Won't say how many shares -- learned my lesson about hypothetical lot sizes. Just hope I don't buy all the Bloggs shares as they head for the hills.
Best regards,
MAD DOG |
