InvestorsHub Logo
Followers 48
Posts 2221
Boards Moderated 1
Alias Born 01/28/2013

Re: art35 post# 9708

Sunday, 05/05/2013 12:16:33 PM

Sunday, May 05, 2013 12:16:33 PM

Post# of 46511

These "PATENT PLAYS" have now been thoroughly publicized, written about, blogged and signaled to the 4 corners of Earth..etc,etc,

Do you think this increased number of players will have a detrimental effect on the height of the SP when they all start selling (at the same time) to get their Pre Markman profits---and post Markman profits,,,,sorta like prematurely halting the SP run potntial---

as compared to the past when there were substanially less traders playing the "patent/lawsuit" mkt???? giving the SP more opportunity to run---both Pre and Post Markman----

But not affecting any of us long term investors who are waiting on the Trial and/or Buy-out--just perhaps giving us a couple nice opps to add shares--



IMO, I would say "No". A catalyst is a catalyst. And a trend is a trend and is your friend. What I suspect MAY happen is simply that the "real" pre-Markman runups over time may begin occurring earlier and earlier as the competition by investors/traders may result in more and more of them feeling that they need to get in earlier in order to truly get in on the ground floor and maximize their gains.

So a savvy investor simply needs to watch such a stock that is on their watchlist closely so that you get in quickly when the signs indicate an unusual spike or volume building. Or you can simply identify an entry point to your liking early on in order to establish a starter position so that you have skin in the game from the get-go, and then average up to ride any waves that may come unexpectedly.

Although the pre-Markman runup is phenomenal -- it is only "truly phenomenal" for those who have gotten in on the ground floor. And most don't. In every play, only a select few are fortunate enough to enjoy the 300% gains leading up to the Markman. For WDDD, this represents those who bought in when the sp was in the low-teens (or even single digits). For the vast majority of other investors whose cost basis is in the mid-.20's or higher, they will likely not see the tripling of their investment that older investors enjoyed. As such, once 6/27 rolls around, I expect that the majority of speculators will likely hold thru the Markman because they see another 75% pop just waiting for them 2-3 weeks down the road, and this pop will match or exceed their gain up to 6/27 due to their late entry and higher cost basis -- so it will be worthwhile for them to hold thru the Markman rather than sell.

IMO there will always be plenty of speculators willing to gamble on a binary event, be it a Markman or a clinical trial result for a bio play.

And will people sell the news? Of course. If you intend to be a long-term holder, then as you state, this is meaningless to you and over time the volatilty will settle down as traders exit and are replaced by investors whose goals mirror your own. HOWEVER, that being said, even a savvy long-term investor recognizes the predictable overbought condition that seems to always follow a favorable binary event followed by a predictable oversold condition. As such, savvy investors find ways to double-dip off the same binary event by selling the pop and buying their position back (and then some) at a lower cost during the retrace, before it bounces back up again.

Continued good luck to all...