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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Zoro who wrote (12990)	2/19/1999 1:50:00 AM
From: Hardly B. Solipsist	Read Replies (1) \| Respond to of 14631

I don't think that it's so hard to understand why IFMX is where it is, although I think that the reason doesn't make much sense. People just look at MSFT and start shrieking...

To: Zoro who wrote (12990)	2/21/1999 4:01:00 PM
From: David Cohen	Read Replies (2) \| Respond to of 14631

And now another article on the psychology of investing, from the New York Times, on why people don't sell their losers. Here's the URL nytimes.com And here is the meat: --START QUOTE--- Extensive research has shown that they are more likely to sell Amazon, or any stock, if they are holding it at a profit than if they're holding it at a loss. Known among researchers as the "disposition effect," this behavior can cost an average active investor thousands of dollars a year. An extensive study of the disposition effect was conducted recently by Terrance Odean, an assistant professor of finance at the Graduate School of Management at the University of California at Davis. Odean tracked the trading histories of 10,000 individual investor accounts from January 1987 through 1993. He found that instead of cutting their losses short and letting their profits run -- two widely cited bits of portfolio advice -- the average investor did just the opposite. Investors realized only 9.8 percent of the losses they could have realized, compared with 14.8 percent of their profits. The reason for that behavior depends as much on psychology as it does on finance. Investors, it seems, will go to some lengths not to sell a stock at a loss. After all, as long as they avoid selling a loser, they can rationalize that it will recover someday, thus vindicating the original decision to buy. By contrast, once they sell a stock, investors cannot avoid the fact that they lost money. ---END QUOTE--- The article goes on to suggest that ValueLine is a good, objective way of sorting these issues out with stocks, since it is not subject to the "disposition effect". Anyway, now you know why we're all still holding IFMX :-) ___ DC

To: Zoro who wrote (12990)	2/22/1999 1:31:00 PM
From: Marq Spencer	Respond to of 14631

Responding to a couple of different thoughts that have been thrown about: * Why is the consensus estimate for Q1 0.04 when last quarter IFMX made 0.17? Traditionally, IFMX (as well as most technology companies) have a "slow" first quarter of their fiscal year, and ramp up to the final quarter of the fiscal year. The last quarter was IFMX's FQ4. The upcoming one is their fiscal Q1, therefore the lower expectations. * Why is IFMX so low? Because no buyer wants to pay more than what it is trading at, and sellers are willing to sell at the current price <vbg>. But seriously, IFMX is neither number one nor number two in the database market, a segment that is seeing signs of saturation/maturation. When that happens in any market, the "smaller" players fall out of favor, and are relatively cheaper than the leading player (ORCL in this case). BTW, at 30x trailing earnings, I would not consider the price of IFMX "cheap". - Brian (long on IFMX)