PROCRASTINATION
ATY
This is very frustrating. I was actually looking forward to today’s earning announcement and I was expecting a small positive surprise. As soon as I read the release, I realized that while the earnings basically met the expectation, the revenue figures appeared to be a toad light ($613 vs. $630), and right there I knew it would be a rough day. I had a decision to make: should I hang on this or should I dump it? I often found this is the most difficult decision. On one side, as an investor, you are not supposed to sell, as long as fundamentals have not changed. In this case, I certain do not believe the fundamentals have changed. The company indicated that the light revenues was caused by supply constrains. Had it fully supplied, its revenues would have been about 10% higher, which would have made it $675 million, well above expectations. Moreover, the company raised the outlook for the next quarter (Q2/05); On the other hand, I knew it would get hit pretty hard and it was (down more than 5%). From here, it probably will either sideline or trend down a little, until next quarter announcement (March). So, there is an argument to sell it now and deploy the cash resources elsewhere and maybe re-purchase the share later at a better price. I have never been able to develop a process that resolve this issue on a rational, logical, decisive, and disciplined manner. In almost all cases, I procrastinate, resulting in doing nothing. Mind you, even I sold it at opening, I would be still got hit by about 5%. A more decisive decision would not be able to avert the 5% loss in any case.
This is very frustrating. I was actually looking forward to today’s earning announcement and I was expecting a small positive surprise. As soon as I read the release, I realized that while the earnings basically met the expectation, the revenue figures appeared to be a toad light ($613 vs. $630), and right there I knew it would be a rough day. I had a decision to make: should I hang on this or should I dump it? I often found this is the most difficult decision. On one side, as an investor, you are not supposed to sell, as long as fundamentals have not changed. In this case, I certain do not believe the fundamentals have changed. The company indicated that the light revenues was caused by supply constrains. Had it fully supplied, its revenues would have been about 10% higher, which would have made it $675 million, well above expectations. Moreover, the company raised the outlook for the next quarter (Q2/05); On the other hand, I knew it would get hit pretty hard and it was (down more than 5%). From here, it probably will either sideline or trend down a little, until next quarter announcement (March). So, there is an argument to sell it now and deploy the cash resources elsewhere and maybe re-purchase the share later at a better price. I have never been able to develop a process that resolve this issue on a rational, logical, decisive, and disciplined manner. In almost all cases, I procrastinate, resulting in doing nothing. Mind you, even I sold it at opening, I would be still got hit by about 5%. A more decisive decision would not be able to avert the 5% loss in any case.
posted by ZIGZAG at 12/21/2004 01:41:00 PM
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