Why do folks only get behind stocks after they have made big runs?

Discussion in 'Trading' started by retaildaytrader, Nov 21, 2010.

  1. http://www.elitetrader.com/vb/showthread.php?threadid=210741

    This is what I DON'T GET about this site and many others. You tell us that LVS "seems bullish", but look at the price...its in the 50s.

    WHERE WERE YOU WHEN THE STOCK TRADED in the 20s or for that matter in the single digits??? Now the stock has risen nearly 50 times in the last year only now are you coming out to say that LVS "seems bullish". WTF?!?

    Why do folks like to get behind a stock only after a big run? Why not come out before the break out to say that you feel it will break out? The beauty of the internet is that if the stock falls from here then the alias can get a new name. In the case of blogs, if the stock falls then the comments can simply be edited or deleted in the future or the blog author can simply state that they told us the stock could go either way versus accepting responsibility for making a bad call and living with it.
     
  2. Obviously the guy who posted the original call is a trend follower and not a "break out" trader. That might not be your style of trading - not mine either - but it can still work.

    So I'm not sure why you had to act like an asshole and create a thread out of it.
     
  3. DrEvil

    DrEvil

    Rather than try to ask why, all I will say is that I am glad that this is the case. Imagine if the majority of traders knew what they were doing.
     
  4. Why are you such a screwball?
     

  5. doc....that's....well.....evil!!!!....:cool: :D
     
  6. DrEvil

    DrEvil

    Haha. It was said tongue in cheek. Silly thread really.
     
  7. hedge123

    hedge123

    Because they're traders, not investors. Mostly technical strategies, little fundamentals, short time horizon.
     
  8. NoDoji

    NoDoji

    Fundamentally, LVS began recovering in 2009 and has been growing earnings ever since. Beginning in May this year, they've beat earnings estimates each quarter, with a significant earnings beat just a few weeks ago. LVS traded as high as 139.00 before the recession when its quarterly earnings were falling and lower than the level it just attained last quarter. This is fundamentally very bullish for the stock.

    Technically, it's been in a confirmed uptrend since August 2009, with the trend remaining intact even through the May "flash crash" and subsequent market correction. This is technically very bullish for the stock.

    The money that moves markets look to invest in companies with strong fundamentals and strong technical price action. LVS has both.

    LVS can easily trade back up into the $100's, making the current price a bargain.

    Did you think NFLX was outrageously priced when it topped $100 and the chart looked like LVS does now? Or CRM at $95? Or PCLN at $300?

    I remember wanting to buy FFIV early this year but it was at a 52-week high of $58, and had a pretty high P/E ratio, so I decided to wait for a pullback. The pullback never came and it's not seen $58 since. It's now in the $120's and I missed out by waiting.

    Years ago we thought solar companies were a good sector to put some of our IRA money in. We found a company we liked and bought the stock the next day when it was hitting new 52-week highs. Did we worry we were paying too much because it had run up non-stop all year and was hitting new highs? No, we wanted to invest in the company and the fact that it was going up was proof that we had the right idea. We had a nearly 40% return on the position in just a few weeks.

    Big runs are a sign of strength, which attracts the institutional money that drives price higher still.

    Since you posted this thread in the psychology section, the better question would be, "Why do folks short strong stocks because they believe the price is too high?"
     
  9. My concern is there were a lot of haters on LVS back months ago even here on this board. Now I dont see any haters anymore and even Cramer loves the stock hitting the "Buy" button.

    I know that anectdotal indicators can mean anything, but its weird how guys like Cramer and the characters on this board always get behind stocks after terrific runs and then whoosh, there they go. Its almost as if anything posted in the "Stocks" section is bound to fail.

    Cramer got behind LVS saying "Return to Sin City" and that he had a complete "About face" on the sector on November 5th. Shortly after, LVS started tanking and dumping. Something is weird here where the very moment Cramer gets behind a stock it starts tanking and failing. The lower it goes, the more Cramer wants to buy justifying as to why almost like a bad gambler at the Poker tables losing his shirt.


    http://seekingalpha.com/article/235391-cramer-s-mad-money-return-to-sin-city-11-5-10

    I remember Cramer ranting and raving in early 2008 how his stock of the year was LVLT and then whoosh, it never came back up...
     
  10. NoDoji

    NoDoji

    Cramer definitely gets behind some doozies, but he occasionally admits his mistakes and apologizes. I do think LVS is a sound long trade until proven otherwise. I would buy the breakouts as a day trade, and if looking to invest in it I'd buy the pullbacks as long as it's not a not a pullback based on bad news.

    Fundamentally this market is rather toppy considering the issues in Europe and lack of anything that can truly spur economic growth. The market is being propped up. "Pay no attention to that man behind the curtain!"
     
    #10     Nov 21, 2010