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Strategies & Market Trends : Due Diligence - How to Investigate a Stock -- Ignore unavailable to you. Want to Upgrade?

To: ubrx who wrote (120)	3/30/1999 11:57:00 PM
From: EL KABONG!!!	Respond to of 752

Jim, I refuse to chase a stock that was just upgraded....but this attitude has prevented me from jumping onto some bandwagons that continue to rise beyond belief. Stocks that rise beyond fair valuations consistently, and continue to rise, are known as mo-mo's or momentum plays. Momentum investing has benefited from recent good press regarding this style of investing. However, historically speaking, what goes up quick, comes down just as quick (sometimes). Again, look at the internuts this past year. Some had days of +100 or -84 and other mind boggling numbers like that. I don't have the stomach to play something that volatile, so I'll just wait it out until the internuts come back to reasonable valuations. I would love to own a couple of hundred shares of AOL or a few other internet plays, but not at the current P/E ratios. Just too darned expensive for now. History says that eventually the prices will come back to fair market valuations. Momentum investors say it ain't necessarily gonna happen. I'll wait and see. There's a lot of other stocks out there better suited to my style of investing. And like you, I'll be darned if I'm going to pay a price close to the stock's all time high just because some analyst upgraded it. KJC