R59- Warren Buffet doesn't buy tech stocks
Why ? He doesn't like to be in stocks that go through vicious cycles of up and down, and where profits are based on quickly changing prices of certain electrical/mechanical parts. He wants to be in the steady eddy stocks that consistently keep pumping out more in revenues and earnings forever ! ESIO right now is in that cycle. If you look at their chart, you can see the stock price can generally as much as go up 5 fold from the bottom. Well ESIO just did that. I mean it's just soooo hard to time the end of a cycle. I believe that's why ESIO was more after the $.54 qtrs were announced than now with around $.75 qtrs coming. I could see ESIO going up to $29, but I could also see it staying in the $24 area for a bit, and then continue to fall over the coming months.
I understand that I've been trading like crazy. Why ? Re, you must understand that when I buy a stock, it's got to act the way I want or I'm out. Now every sector is different, so I may get out for different reasons. However the bottom line is, if a stock doesn't perform the way I think it should after given news in a given period of time, I'm out. I was killed on LCI & many others for just that reason of being stubborn. I can't tell you how many stocks I lost huge on for being stubborn & going against my own rules when a stock didn't act right. Now I've outlined the exact rules I use in general in deciding when to bail & posted on the board. However one rule I didn't list was, if you feel you are at or near the top of a cycle, don't risk it- bail immediately. Stocks can fall way too fast if you misjudge the end of the cycle, so better to take less of a profit than to risk losing most of it back super fast.
Re, so many on this board say I need more patience, and that I expect instant gratification. Well I do expect pretty immediate gains on stocks I buy, and with good reason- I often get it ! If this was such a bad method, I would never have the track record I have. SS tells me my timing is bad because I get into a stock often after it goes up a lot. What SS doesn't understand is, it's better to get into a stock after you know it's on an up cycle. I mean just because you don't catch the beginning of an up cycle, doesn't mean it's bad timing ! In fact I think it smarter to buy that way. Also in general, whether you should buy a stock in general should be judged on how much upside it has now, not on how much it's risin already. I mean some stocks keep going up for years. USCR & PRAH both have, and I see no end in sight.
AI
