Guide on buying tech stocks

[Pretender]

Any company who uses at least 5 "e-" words (i.e. "e-commerce", "e-shopping", etc) in their advertisements.

Any company who claims to be 'revolutionizing' or 'simplifying' any aspect of your life, or any other internet service ever.

Words like "global", "mega", and "super" are in the dictionary for a reason...they make great company names. Any company with a good name has to be a winner

Companies who tell us that they will be moving society into 'the future', 'the 21st century', or 'the digital age' (how can they do that without a time machine? :Q).

Companies who take credit for their achievements (hey, if he found a way to create the internet maybe he can solve this damn 88:88 blinking on my vcr).







I have no idea where I'm going with this, but some companies just anoy me.

 

[Total Refected Power]

CNBC Squawk Box Favorite:

"Leveraging the brand on the broadband".

 

[HKSturboKID]

Basic concept in buying any stocks

Buy high sell low! (damn tech stocks is brutal)

wait...maybe its

Buy low sell high!

Loss 10Gs in Tech stock this year.

 

[Cknyc]

Dont listen to CNBC and dont listen to most Analysts.
I say most becuase I may be going into that field very soon. Buy optical producers, and semiconductors with discretion of course. Dont listen to what anyone says do your DD and youll be rewarded.


I bought JDSU at 100 some time ago. went down like a bixch after nortell earnings (probably because CNBC was scaring everyone), I bought some more in the low 70's. SDLI and others in the industry are doing great. After the close today JDSU reported a 171% increases in Rev's I believe. Jumped up about 15% in aftermarket. Just wait until tommorrow. Same story in Semi's, think of PDA's Cell phones, net appliances, computers, the list goes on and on. Just think about it these are the greatest industries for the next few years. Concerning F. optical companies, just think about all the bandwith that people still want. I know that my dsl provider is having trouble keeping up with demand. I also know that Time warner has the same problems. They keep needing fatter and fatter pipes. The situation is not much different everywhere else. Hell Europe has yet to even enter home broadband yet..

Look at it this way fiber optics and semis are here to stay. We are increasingly becoming more reliant on technology and these are the industries that are going to grow and grow. Just use discretion and study financial statements. If anyone wants to discuss please email me. I have been out of the loop for about a month because of large amounts of school work.

 

[LocutusX]

How's this for a guide to buying tech stocks:

DON'T BUY ANY!

I've gotten burned so badly in the market recently, and my portfolio is all tech stocks. I wish I had put all my savings into a 0.1% interest savings account or something.

 

[Cknyc]

Problem is you bought at the wrong time, and you probaly bought too much. Did you consult a broker? I argue with my parents all the time about this because they dont htink they need proffessional help. They think they can do it all alone. Ill tell you that its a lot harder choosing stocks at home. I have a lot of resources too. Last year up to this summer it has been very easy for me to make moeny because I worked at ML and was watching the market the entire time. I knew what was going on with all the top stocks. The fact that people made money in 98-99 doesnt mean that they became proffessionals over night. They were just in the right place at the right time. Right now I dont think the average investor should be in the market. Unless it is in a balanced mutual fund. This is a wild market and it even makes me sick to my stomach somedays.

 

[HKSturboKID]

CKnyc,
now that you bought this up.
I bought Covd (COVAD DSL)at $13 and i thought that was a great price. Guess what after the earnings went out it went all the way down to $3.50.
SDLI - after NT warning damn thing drops $83 bux yesterday and it drop even more at open today. I almost have a heart attack.
T (AT&T)- I bought this crack 2 yrs ago at $60. I figure this is a stable stock and guess what...Earnings warning and this thing just sank! Now down to $22 or something and they are breaking up the damn company.
AOL...forget about it. I bought it when is split beginning of the year about about $80 and guess what It never went back up.
I didn't even want to mention the pennies stock that I try my luck on. Bought a couple of thousand it at $3 and now is like .05 cents. If I sell it I probably have to own the broker money for the commission.

This is not my year. Better luck next year.

 

[Cknyc]

Just watch SDLI tommorrow. Its going to rocket. In the aftermarket SDLI is up 25 to 266. Its funny you mentioned covad. I dont know much about it, but a friend suggested buying it over the summer. I stayed away becuase of the fluctuations that stock was having. He got out too fairly quick. The ISP's are different than the technology producers. AT&T has financially not done well this last year, which is as long as I have been following it's because they have not kept up with competition and market changes. They also went nuts with buying cable corps. I hope you didnt buy at 60. AT&T will do well in the long run I have heard rumors of breakups or spinoffs. These may help the stock. AOL has dropped for various reasons. As long as it can keep its steady rate of growth to warrant its PE it will rise. I was shocked last week when AOL dropped to the low 40's and think that it was completely a market over reaction. It will rise after it merges with TWX and shows investors and institutions that it can make money without destroying markets in which its partner is in.

 

[HKSturboKID]

I read the paper today and they say that the breakup will be completed by 2002. They are looking to break up into four little pieces.
I don't know if I can hold it for that long. I may just take the lost and get tax write offs.
COVAD is a DSL provider and they were hot 'once' guess not anymore.

Intel...Down from Earnings
Apple...Down from Earnings
IBM.....Down from Earnings
Nortel Networks...Down from Earnings
Who is next????

 

[Cknyc]

I didnt read the part where you said you bought at&T at 60.. Another thing people have to learn is to sell when necessary. I have heard different strategies. From dividing what you expect to gain in half. For example if you expect a 10 dollar gain and hte stock drops you should sell if it drops by 5. Some just say set a limit. Either way its hard to sell at a loss. I learned this the hard way a while ago. With pennies I have no suggestions.

 

[Cknyc]

Well you should have know about intel coming to a board like this. Apple I never liked becuase I dont like apple machines and dont believe that they can actually hold their market share. I dont follow NT. I dont think they are a fiber optics company. They seem to be similar to LU. Again there are always stray apples in the industry.

 

[HKSturboKID]

I'll guess I'll learn now.
I am so annoy that I don't even want to bother with it anymore. Hopefully I'll be rich in like ten years or so. The more I look at it. The more annoy I'll get.
should invested in my 401k or something.

 

[perry]

HKSturboKID,

With tech stocks this year, the ticket has been sell high, buy low. Short! Short! Short! My stupid roommates keep putting money in this one company and keep losing it. I keep telling them to short the stock. Stupid thing lost 40% today (between the two of them they invested about 10k).

 

[LocutusX]

Cknyc,

I recieved advice from other "long-term" investors (and a few books) that the summer season is typically a down period for the markets, and that after the summer is over, buying picks up. Which is why I made those purchases that I did. I've studied stocks, read a book by the Motley Fool and another by Warren Buffet, and played a stock simulation last year which is why I thought I knew what I was doing. I guess this year is the exception! Or maybe the market is going to be "crazy" from now on. Anyways, for all of the stocks I bought, I was sure to buy them at prices very close to their year-low. Problem is, most went below that recently. Sometimes I keep up with posters at Yahoo! Finance forums, but most of those guys seem to be more clueless than analysts. j/k if you are one.

 

[lsd]

<< How's this for a guide to buying tech stocks: >>





<< DON'T BUY ANY! >>



Amen.

The nasdaq is not doing too well. Most tech stocks are doing poorly.
Case in point: I bought AMD @ 30 1/4, it dropped and continued to drop even though they had record earnings

 

[Cknyc]

I totally agree. I havent looked at my account since JDSU dropped I cant bare to see a 30% loss. I know tommorrow I wont have to. Anotehr thing that you need to do is be picky in this market. A lot has changed because of the april correction and the various smaller ones that have occurred since. Another question do you know anything about shorting, trading options? September was a great month to trade derrivatives. I unfortuantely cant becuase uf capital requirements and the fact that I am on a students salary. The only companies that will do well are the ones that show incresing growth to support the high PE's. My final note is that if you buy now, wisely you will be rewarded handsomely in the future. Just imagine getting back to 5000 on the NAZ. I gotta get back to my work I have a damn thesis on international wages to work on...

 

[Cknyc]

LocutusX,
Will be one soon. I would love to keep talking about this stuff but i gotta get back to work.... I also suggest dont buy any as LSD says.(or better yet wait for another drop) I bought with you at the end of the summer. I bought into two large positions of ATML and JDSU. Those are the only two stocks I have been following lately and their respective industries. If you bought wisely, not saying you didnt but you must not have researched them enough. Think Net Income Net Income Net Income. It needs to rise to keep PE's high. The problem is that many of these stocks are so high that even fantastic earnings cant keep the prices up.


LSI is another stock I have been looking at and wish I decided to buy a week ago. I just have been out of the loop that I dont know whats going on anymore. Over the summer I liked wireless companies such as ericy, mot, nok. My reasoning behind semi's is that they have explosive rates of growth and their pe's are low. So there is value in these stocks that hasnt been priced in yet.

Locutus. 99 was the exception. This year things are transitioning back to normal. The transition is the bumpy part. Seems very bumpy.. I wish I had the brains I have now back in 98. I would be able to buy my boxster right out. no financing

 

[Cknyc]

When you listen to analysts take it with a grain of salt because most of these analysts work for firms that are in the MF business and hold many of these stocks. Next many of these analysts work for firms that did the underwriting of these stocks (In the case of new tech stocks).


I loved the rambus story. I mean most of us knew what was going on. Same with AMD. I use to own amd back when it was 20 dollars a while ago. I got scared when it dropped to 12 and sold at 22. Boy was I kicking myself later on..

You need to educate yourself more on the companies their products, their financial situation and their goals.

 

[Cknyc]

21 more posts and Im a gold member.. woohoo but gotta get back to work Sorry for the spelling, I only took one english class in college. I rely on spell checkers, or secretaries.

 

[Cknyc]

The reason 98-99 was so crazy was because the investment banks were holding many shares and so were the companies of internet companies. When the IPO popped the IB would only sell a small portion to investors. The bankers and I. companies were holding a ton of shares at primary market prices. While the banks only issued a small amount of shares restricting the size of the float. Demand easily outsripped supply and these IPO's would rocket. Eventually after the 6 month holding period many stocks would deflate becuase executives in firms would want to cash their chips to buy expensive cars and houses.

 

[Cknyc]

AM I talking to myself. Sorry for the babble

 

[tgillitzr]

heh, yes you were

but thats ok, it was pretty good info

i bought AMD at 23, currently down from that, but its gotta go up in the long run

 

[Cknyc]

I like AMD also, I just dont like the amount of debt they have. The dresden plant was expensive. I hope they can keep up the good work though. If they can the debt wont matter.

 

[Handle]

Well, if you can make a good profit in the current market, you must be doing something right. It's quite a bloodbath, and companies are getting slaughtered (Lucent, Apple, recently Nortel, etc.) for relatively minor deviations from expectations. However, most of them were overvalued, trading at massive P/Es.

I'm a fan of penny stocks personally, although I will place my standard warning here: they are not for everyone, they require constant attention, people say that most people lose money playing with penny stocks and I believe them. However, if you are lucky (yes, luck is required) and you look at the company's fundamentals (believe it or not, many penny stocks have great fundamentals) and you time your entry right (don't buy on a run) then you can come out OK most of the time. People say penny stocks are dangerous, but looking at big companies like Cisco, Lucent, Nortel, Apple, etc. losing so much value makes penny stocks seem less dangerous. And at least with penny stocks you can dream of massive profits (I don't honestly think people who own Microsoft expect it to double anytime soon).

I see penny stocks trading at P/Es (yes, they have positive earnings) of around 6 or 7 in the technology sector. As long as a company like that can continue growing and garnering attention, they should eventually pay off handsomely.

On the other hand, I see shell companies (they don't do anything, they're just waiting for acquisitions/takeovers) that trade at $30 million market capitalization. Those are almost a perfect recipe for disaster.

 

[stonerdave]

Handle, who do you use for penny stocks?

I agree with you about shell companies...especially in the wireless/networking divisions. I got burned on a stock called IWAV, interwave communications (gsm equipment, Nortel owns 1/4 of their stock). Bought it at 9 and sold when it was 20, but I rebought it at 8 a few weeks back and it dived to 3 and change. Oh well, could be worse...only had 100 stocks.