I've been waiting to short this for a good while and am getting ready to pull the trigger. P/E= 160 Run from 8.75 to 25 in 6 months... This is set for a big fall back to 17.5 or under over the next couple months. Any thoughts?
Yes, eventually the pig will fall, but there's no rule that says it can't keep going up more before it comes back down. Just be careful, or protect yourself with options.
I saw that today and I was thinking the same thing....but then I started thinking that if the war ends quickly and and good form you could have a big rally and positive earnings coming out...a lot of people are hitting the net because of the war so won't subscribers be up? hence more advertising dollars? what about aol as a BUY at this level based on more internet traffic?
I have owned AOL in my trading account since July. I got assigned @ 15. My cost basis is about $8/share now, from trading around the position.
Both of you pose good points. If the war does ends quickly, there is no reason why the Naz won't rally back to 1525- sending Yahoo to $30. I was very tempted to short the pig at 22.5 last week, but decided to let it exhibit signs of fatigue first. It isn't wise to short a stock that continually makes new highs, but I am convinced that in a couple of months, YHOO will fall hard as the big boys unload and lock in their profits. Its all about the timing. Regardless, I'm getting ready to short this soon with a 10% stop from my point of entry.
That's the thing. Never try and time the top (or bottom). Always wait for weakness to jump on rather than fight the tape. If you choose to try and time it, protect yourself with options (or stops if daytrading).
I would prefer to short AOL because it is clear to me that it will not survive amidst the ensuing cable-connection revolution. To be honest, when I had AOL about 8 years ago, the only feature I found useful was its messenger system. Now you can get the messenger software free (and if they happen to pull that from the market, which I doubt they will do, there are always other free messenger packages available). People are beginning to realize just how much of a waste of money AOL subscriptions really are. Steve Case knew well what he was doing when he got turner to merge with aol; I just can't believe that the "too good to be true" bell didn't go off in turner's head when he heard the terms of the merger. AOL would have done better to merge with a company that offers cable internet connections, I think. Then it would possible have a chance for future survival. Also, I would not suggest anyone to short yahoo either. Remember, the trend is your friend and don't pick bottoms (or tops).
Time Warner offers cable internet connections and is the largest provider in some parts of the country.