Thursday, May 17, 2007

Interesting Forbes Article


Today I just pumped two names out of 12 in the list above: RAIL and OVTI

The truth is when you see value, other people see it too, when you see value stock getting cheaper, other people see it as well, eventually those value-cheap-losers will be in a lot of ppl's watchlist and become highly controversial losers, our main target in this blog. Once the trend reversed either natually (value driven like PLXS) or suddenly (news driven like MCZ), you have great opportunities to play.

There are many good stocks out there, I am not saying HCL is the only way to go, I am saying it might be the most efficient and systematical way to go to find highly profitable picks for trading and investing.

In a nutshell, it combines the momentum(DTer's favorite), sustainability of trends(Swinger's love) the value (Investor's holy grail).

If you come from value investor side, all you need to do is a little bit more patience (which I assume you already have, since without patience, you are not going to perform as a value investor). What to wait for? wait for bargain deals become sweeter, wait for the sign of end of downtrend and start of uptrend.

If you come from the trader side, first of all please drop your assumption of efficient market theory, it is not true. Keep your eyes and mind open, take advantage of amature "value investors" who think they are following Buffett, but they are really not. Buy-and-hope is primarily what they are doing. However they cannot always be wrong, once their hopes are actually realized (the probability is usually fairly low, especially those Buy-out rumors floating around), join their party. Once their hope turned out to be disappointment, beat the dead horse immediately without hesitation, I don't even care about if it is the very horse in investor me's own barn. I short ASPV after ER, I put OVTI after EK conference call, that's trader's best show time.

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