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On Finisar
I wrote
about Finisar on 2/10/2010. At the time the stock was at 11. I liked it
then, and said so. It got up to $44 recently. Last night FNSR had some
disappointing news. The market is going to shoot the stock at the
opening for about $15 bucks (37%)
So my PnL sucks this AM. Yes, I still have a 100%+ return on the books. But I still feel a bit poorer. Such is life in equities.
Finisar is a good company. They make the switches that are necessary to
regulate data on fiber-optic networks. They are part of the “Cloud”.
That is a very hot segment that is going to expand over the years
regardless of the broader global economy. I think that FNSR is an
acquisition candidate. Their market cap this AM is $2b (down 800mm-ugh).
This is not a very big “bite” these days. I have no clue where the
stock will trade in the next few weeks. If it gets down to ~20 I will
buy some more.
I’m kicking myself over this one. Not so long ago I looked at it. I’d
held it for more than a year, so the tax strategy made it a sell. I had a
300% paper profit. I never get that, so I should have taken it. Some
thoughts:
-There was a lot of “fluff” in the $40 FNSR print. It was a mini bubble.
-After a 100% gain in the big indexes where many individual names have seen 200%++ increases. There are MANY other ‘names’ that are now at ‘fluff” levels. APPL & NFLX come to mind.
-Individual stock volatility is going to increase. As a result, broad market Vix is headed higher.
-The fucking Buy and Hold is dead. When big
gains are presented, you have to take them and not look back. When you
get lazy and are not proactive you get burned. I knew that. But I
ignored it, and lost. What does this mean to the average 401K investor?
-The FNSR blowout is, in part, a reflection of QE.
Bernanke wants stocks to be valued at unsupportable levels. He thinks
the wealth effect from overvalued stocks leads to consumption and
economic growth. To some extent he’s right. But it goes both ways.
When I thought of offloading FNSR and taking those big profits I
actually considered buying that new GM Volt. After all, the
market/Bernanke/QE had just bought me a new car.
Well screw that. Screw FNSR. Screw the slow down in China. Screw the Volt. Screw GM. Screw Bernanke. And most importantly, screw me.
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Appreciate your honesty BK, a person who is open about their bad trades earns more credence in general, vs the shill who "only ever has winners". Quite a few of the latter around these parts, one of the many reasons my participation rate has dropped to nearly 0.
Still stop in for your posts though.
I've never read a post like thisw and I want to thank you, thank you, thank you..... From the bottom of my heart. I feel like such a loser when I make a mistake and now I realize that even genius makes mistakes. And sir, compared to my amateur ass you are a pro. Everything I've learned here has netted me major gains in three years. Thank you Zero Hedge.
Bruce- good post; I bought vxx last august and rode it all the way to wiping out my year's gain... I actually thought bernanke wouldn't be as stupid as he turned out to be- or, just as likely, I'm the dumb one... Oh well, new year now!
Isn't cloud the program whereby everybody gives away their industry secrets to enable a smooth globalist transit of power?
Don't feel bad Bruce, I missed the silver bullet with my piddling wealth, do you think it's too late for me? And what about deflation, how's it going to effect pm's?
And would you care to comment on Lindsey Williams latest: "Staged destabilization of the middle east, no war but turmoil to get them back on the (camel's) saddle.
When oil is 150-200 usd p/b, US opens it's untapped fields crushing the middle east, (and Canada?).
TBills go to zero. ditto US securities.
Then crude, the defacto currency of the world remains king and US citizens now make wages equivalent to 3rd world peeps, and the US rises again on the blood and tears of its' citizens with the oil-kings in charge of the whole centralized world."
Please comment Bruce. thanks 4 ur writing. :)))
Check out detailed institutional holdings:
http://www.nasdaq.com/asp/holdings.asp?symbol=FNSR&selected=FNSR&FormType=Institutional
Maverick Capital got whacked chasing this puppy up (assuming they're still holding it). Momentum stocks like this are always risky to hold into earnings. Looks like Cramer's call on optical stocks just got some hot air sucked out of it. Stock might test or go below its 200-day m.a.. We'll see if big funds load back up on this weakness.
I still remember Redback over 10 years ago. Was a bubble then , another bubble now for FNSR and others . Only difference is now you have mortgage bubble, bank bubble, fiscal bubble, energy bubble, commodities bubble, dollar bubble, municipal bond bubble, China bubble , Middle East bubble---
Seems like we are in for one giant BUBBLE BATH
Brucie baby Krasting
"..Cloud...is a very hot segment that is going to expand over the years regardless of the broader global economy.."
100% WRONG
Cloud is the same mistake as IBM made thinking mainframes were the way to go instead of PC's. Cloud is the computer Corps next mega-mistake for the same systemic reason: they think centralisation (of software) betters small, flexible, disparate and personal. Dream on muppets
Cloud is going to go the same way as mainframe, up the cloud computer companies rectum ...and you keep making the same mistake Brucie with your love of centralising everything (Govt, regulation, law and now software) .....so I'll have to keep teaching you the lesson of decentralisation and the benefits of a free (unregulated, un-policed) market (and society)... you want to bet on it Brucie Baby?
My MAHN!! All well put!
<<< He thinks the wealth effect from overvalued stocks leads to consumption and economic growth. To some extent he’s right. >>>
Destroying the value of the US Dollar creates a "wealth effect". It destroys wealth of millions of Americans who don't have sufficient liquidity to speculate in the rigged casino.
Running massive trade deficits creates a "wealth effect". It transfers wealth right out of the US.
Racking up massive federal debt creates a "wealth effect". It saddles future generations with massive debt and encumbers them in their pursuit of wealth.
Kiting the stock market is not a "net win" for the economy. The massive debt and the surge in commodity prices are destroying at least as much wealth. That is the fundamental truth behind the failure in printing fiat currency. You can not create net wealth by doing it.
Mark my words you will be saying the same thing on NFLX when it goes to zero
Haha. Good post Bruce. We've all been there. Can never read this lesson enough. Sorry you had to be the teacher, but thanks.
I feel ya... long JDSU, sympathy screw job.
Utilities to the rescue. Oh brother.
Bruce, I know trading is tough and understand its problems in Helicopter Ben's days. As an engineer, the Cloud is nothing more than the latest hype. Here is the reason why. What company in the world is going to give up their sensitive information to another? What happens if relationships sour? Yeah, the SHTF will occur along with lawsuits and other unpleasant results. Companies accessing the Cloud will be held hostage. The Cloud is BS. Any tech company banking their future on the Cloud should go under.
Speaking as an industry insider (way inside) the cloud is not bullshit.
Your concerns are money-making opportunites given the right engineering. The money looks huge.
Nuf said.
Absolutely, There may be a small niche but not for everyone.
Since Micro$oft is a big supporter, that should be telling right there.
100% doesnt seem bad-- on the + side. Hard to catch a market at the very top they say. enjoyed the read
Nice sense of humor, I'd say. But looking on, it has this other meaning.
That is the ultimate mantra for a trader in a 'weighted' game whose issue is inevitable : "screw me". Like a roulette player who can't buck the wheel. It's in his blood until it sucks it dry and his parting words are : screw me. Pity there is no real game where the table cannot be tilted by those who own the game. But who wants to believe that!
I'm sure you are not there. So there, play away, as the wheel turns once more. Its a lust for life so who am I to deride. We all end up like the ZH mantra says, anyways. The capital markets : America's greatest legacy to future enterprise. For the Perfectus, not for humans. Maybe Ben Bernanke is the only real Perfectus. We're just too dumb to see shit from shinehole!
Falak, you sound a little fatalistic, even defeated. Like an intelligent, frustrated trader.
Money can be made in this and any other market where money is being made.
The prices have to go up, down or sideways. If governments and shadow organizations are meddling, swing with them unless it conflicts with your principles.
I have no principles. I know my position in the food chain. I am a krill taking small bits of flesh from slow-moving whales being torn by tiger sharks. I am thankful to sharks. I also try to stay small enough to slip through their teeth.
I don't consider myself a trader. But an investor. I do understand why I moved out of stocks in 2007 before the crash. I haven't move back in since then. And I won't until the correction occurs. I choose to invest in my company or in sure bets I do understand like micro real estate sectors where I live. I have nothing against PM in small hedge terms. But I won't move back into assets until this madness is cleaned out totally and due diligence then truly apparent. Too bad if I mess the bull runs. Never do something you don't understand or believe in. That's my investment philosophy.
Wonder how Buffett is really feeling these days now that the S&P's meteoric rise is blocked by the oil juggernaut. Would love to see TD or somebody dig into Buffett's (in)famous 1600 S&P insurance puts (or whatever that target might be).
If you knew it was 'fluffy', why no hedge? Could've covered and bought some dip while you waited for that offer from CSCO.
...shoulda...woulda...you know the drill.
greedy. stupid. The usual...
We all do it..., we will all do it again.
I keep looking at my SLW...., and wonder....
too busy writing good articles for us Bruce ? I always think of equities this way - where will this stock be if the Dow hits 3000 ? Answer = leave nothing on the table.
As another poster said, (in effect), after a long run, when the tops get frothy, catching the top is not something that can be done consistently (unless you are in a position to manipulate the price. Bottoms are easier and when in doubt, "Leave something for the other guy."
"Bulls make money, bears make money, hogs go broke."
Volt, yuck! I have a six mile drive to work, so gas is not going to eat me alive.
I'll keep my supercharged, hot-rod truck, FORD LIGHTNING. ;-)
Looks like GM will not sell Volt number 42.
Ya know who bought 41, don't ya?
Active "benchmarked" managers are under enormous performance pressure these days. Hedge fund managers are chasing the market. This gives rise to the enormous single-stock moves like we saw today in FNSR. Nobody has any tolerance for disappointment. We will see even more of this in the April earnings season.
Meanwhile, you bought it well. This is the hardest part. Most of us are bad sellers. Congrats on the profit.
The Volt sounds like a bad deal even with the house's money and this winter you would have froze your ass off in a non-combustion vehicle.
Sometimes the best trades are the ones you avoid.
Still short the yen?
No, I fucked that one up too. I did write about it. A piece called Dis and Dat.
Net net. It was a bad call.
http://brucekrasting.blogspot.com/2011/03/dis-and-dat.html
You're too hard on yourself today.
BTW, your Ponzi Science post was a real eye-opener and much appreciated by many of my friends mired in higher ed debt.
When I thought of offloading FNSR and taking those big profits I actually considered buying that new GM Volt
Bruce- Really? a Volt? Good God man, we have to work on your taste in automobiles. If you wanted to support American made eco-friendliness go Tesla.
Long FNSR or Long the Volt would have been the same trade. So it wouldn't have mattered if you switched. But don't worry Genocide Ben's looking at the dip in FNSR and using it to justify QE3.
On yeah on that Volt crap "Electric car sales faltering"... for every electric POScar NOT sold is +$7500 back in taxpayers pockets.
http://www.usinsuranceonline.com/news/article/electric-car-sales-falteri...
Your link raises a good question about insurance. Lithium is like a thick paste which I assume is pretty well protected from crashes, but what happens in a severe enough accident when the batteries are exposed and maybe add a little water.
The insurance companies might not like cleaning up such a mess.
go easy on yourself bruce. there'll be better days. be thankful for what you have.
Bruce, if it makes you feel any better, I have been there, done that, bought the t-shirt, did it again, and maybe once more. If there is a person on Earth who may be constitutionally incapable of learning from their mistakes, it might be me.