FALLING KNIFE 2
MRGE
MRGE blew up again this morning, further delay its filing and restated its Q2/Q3 results. The "cockroach theory" is right after all. This is becoming a much bigger concern for me and I believe I have to cut loss and run. My original theory no longer holds and there could potentially more cockroaches coming out. Despite the loss, I have to try to preserve the capital to fight for another day. Every time I speculate, I loss. It almost never fails. This is so difficult and frustrating. Just as I am ready to move up, a couple of stocks blow up. How will it play out though? Will shorts cover after the opening? Sold. I have suffered quite a bit from "falling knives" recently (SFCC, MRGE, VPHM), not to mentioned those value traps (ABT, BSX, ORCL). I think enough is enough. From now on, NO MORE FALLING KNIVES. Buy good company on the way up.
VPHM
One of the worst thing of a bad stock pick is that it causes so much anxiety that you lose your focus. That was what happened with VPHM. It probably was a bad idea to pick up at 20, but it was definitely worse idea to add at 16. Today, I was unable to do anything at all, other than watching this falling by more than 35% in a single day.
While I am still in pain of this terrible loss, I would like to put it in perspective. Even after today's big drop, it really represents less than 1.5% of my entire portfolio. It is significant, but manageable. Forget about the past, thing about the future. What should be done in order to limit further losses going forward. I believe it is too late to sell here. I do not believe the stock will fall to $5.0 level, given its significant revenue and operating profit growth in 2006. I believe it will bounce a bit from here, which may be the time to scale back a bit in order to limit future losses. This is not supposed to happen to me this year. I am rather disappointed. I failed to recognized the tremendous risks with VPHM, and I listened other's tip. (TIPS IS FOR WAITERS). I averaged on a falling knife. Too many mistakes for one highly speculative stocks, in the most difficult sector. Let's see if it can recover to 13-14 level next week.
MRGE blew up again this morning, further delay its filing and restated its Q2/Q3 results. The "cockroach theory" is right after all. This is becoming a much bigger concern for me and I believe I have to cut loss and run. My original theory no longer holds and there could potentially more cockroaches coming out. Despite the loss, I have to try to preserve the capital to fight for another day. Every time I speculate, I loss. It almost never fails. This is so difficult and frustrating. Just as I am ready to move up, a couple of stocks blow up. How will it play out though? Will shorts cover after the opening? Sold. I have suffered quite a bit from "falling knives" recently (SFCC, MRGE, VPHM), not to mentioned those value traps (ABT, BSX, ORCL). I think enough is enough. From now on, NO MORE FALLING KNIVES. Buy good company on the way up.
VPHM
One of the worst thing of a bad stock pick is that it causes so much anxiety that you lose your focus. That was what happened with VPHM. It probably was a bad idea to pick up at 20, but it was definitely worse idea to add at 16. Today, I was unable to do anything at all, other than watching this falling by more than 35% in a single day.
While I am still in pain of this terrible loss, I would like to put it in perspective. Even after today's big drop, it really represents less than 1.5% of my entire portfolio. It is significant, but manageable. Forget about the past, thing about the future. What should be done in order to limit further losses going forward. I believe it is too late to sell here. I do not believe the stock will fall to $5.0 level, given its significant revenue and operating profit growth in 2006. I believe it will bounce a bit from here, which may be the time to scale back a bit in order to limit future losses. This is not supposed to happen to me this year. I am rather disappointed. I failed to recognized the tremendous risks with VPHM, and I listened other's tip. (TIPS IS FOR WAITERS). I averaged on a falling knife. Too many mistakes for one highly speculative stocks, in the most difficult sector. Let's see if it can recover to 13-14 level next week.
posted by ZIGZAG at 3/17/2006 08:35:00 AM
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