Last week I bought 8 shares of Micron since EVERY article online said it was a must buy with huge upside potential. The next day it dropped significantly from the $995/share I paid. I was hopeful it would turn around, especially if I held it for the next 10 years. Now today it is down in the $880 range. Feels like a very risky stock at this point since it seems to be affected by OTHER chip companies issues. I can either hold and risk losing my $8600 investment or sell and take an approximate $800 loss and buy something else.
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- Wanna die poor? Trade a lot!
- Wanna die rich? Buy and never sell!
- Wanna be careful? Look at charts
The Captain
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Hello @Emitfudd, looks like you been around the boards for about a year? What is your investing experience and what are your investing criteria?
Buying ANYTHING because all of the internet tells you to is a losing game in general. If that was the only reason you bought MU, then you have no reason to hold it either. The FOMO will get you buying high and the fear of loss will be making you sell low.
I would look at what I expect from the chip industry in general and where do we expect that to go from here. The whole industry was WAY to pricey for me, and I have been watching chip stocks for over twenty years. What I have found is that I can never time it right and I have bought darlings only to watch market fear show losses.
I own two chip stocks for last few years, and they are also in same bubble territory, but I understand the businesses. I watch their numbers and I follow their possible markets. I see that everyone will need NVDA for a long time…I see that everyone will need AVGO for a long time. I have NO idea if people will need MU directly for a long time. There are a lot of competitors in their niche. Also, the recent scarcity of chips was just a blip…in my mind.
You have to make your own decision. The MF is not a place where you will (ore should) get REDDIT like answers of pump and dump and fear mongering. That is what makes these boards different.
Did you buy MU for any other reason? Do you have other chip stocks? How much of your portfolio (%) is in MU? What are the actual numbers that would cause you to sell?
My investing experience is bad over the years but good as of the past 4 years or so. When I was younger I followed my mothers advice and had stock such as fidelity low priced stock. My account balance never increased so I ended up cashing out my account the first time to pay off debt to buy my first house. The second time, I inherited a joint account with the same low performing stocks. I sold that as well. A few years ago I decided I had better start investing again in order to have anything for retirement. I am 56 now. I picked all my own stocks. I spent a lot of time reading up on good stocks to buy although I am not a financial person and don’t wrap my head around investing terms other than P/E ratio. I have maxed out a Roth IRA every year for the past 4 years and I have doubled my money.
I currently own stock in Apple, AMD, Amazon, Bank of America, Costco, Google, Coke, Nvidia, Tmobile and now Micron.
I am into PC gaming so I am pretty up to date on the tech and the performance of companies like Nvidia and AMD. I also believe in them and have been well rewarded. Who would have thought AMD would be hitting 550/share?
I have been struggling over the past few months to make a decision on investing more money into the stocks I already own or finding the next stock that will provide large gains over the next decade.
I don’t know how much you have read up on Micron but the consensus is still a strong buy. There was no reason not to buy it especially with their numbers. I still don’t understand the up and down in the chip market other than something I read yesterday that stated a lot of investors are likely selling at this time to take the profit since the gains have been huge over the past year.
I do not agree that the chip scarcity was or is a blip. The general consensus in the PC industry is that memory prices for PC’s are out of control and won’t stabilize for years.
I think my portfolio is around 10% Micron. For now I guess I will ignore the ups and downs and hope it provides a good return over the next 10 years until retirement rolls around.
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LOL…AMD. I bought it as the contrarian play like 10yrs ago because I liked them in my PC and I thought NVDA was overrated. I was in and out a few times taking small profits. Then NVDA found bitcoin mining, then AI, then then then…
But yeah, AMD just kept trucking but I never had confidence in my chip picks back then. Congrats on that.
As for chip industry, it seems Tiawan Semi just announced good earnings and raised guidance.
The P/E ratio by itself is not all that informative. Each industry has its own average P/E. 15 might be good in one industry and poor in another. Reading is good! I recommend reading books by and about successful investors. One Up On Wall Street by Peter Lynch would be a great place to start. He recommends investing in what you know because then you understand the business and can tell good from bad.
A post from a quarter century ago:
BTW, I gave up on Gilder, brilliant as he is. Investing in technology qua technology is a loosing game. Invest in technology that is profitable. One of my biggest losses during the dot-com bust was Global Crossing. They did everything right and went bankrupt. The cost of optic fiber dropped so rapidly, much faster than Moore’s Law, that they could not amortise the investment.
Google AI tells the story:
The dynamic you are describing is known as Butter’s Law of Photonics, which states that the amount of data coming out of an optical fiber doubles every nine months, causing the cost of transmitting a bit to drop by half during that same span.
During the late 1990s, this exponential technological leap was supercharged by Dense Wavelength Division Multiplexing (DWDM), a technology that allowed multiple data channels to be sent over a single strand of glass. Overnight, the capacity of existing fiber networks expanded by a factor of 100 without anyone having to dig a single new trench. [1]
Global Crossing, along with competitors like WorldCom and 360networks, fell victim to a massive supply-demand asymmetry:
- The supply explosion: Companies collectively laid more than 90 million miles of fiber optic cable globally. Because of DWDM, the potential bandwidth grew far faster than Moore’s Law. [1]
- The demand lag: While internet traffic was growing rapidly, it did not grow anywhere near fast enough to consume this instantaneous mountain of capacity. Only a tiny fraction (often estimated at less than 5%) of the laid fiber was actually “lit” and utilized. [1, 2, 3, 4]
- The commodity trap: Bandwidth rapidly became a generic commodity. Wholesale bandwidth prices collapsed by upwards of 90% in a matter of a few years. [1]
Because Global Crossing had funded its massive undersea and transcontinental buildouts with billions of dollars in high-yield debt, it required high, stable bandwidth pricing to service that debt. When prices plummeted faster than anyone’s financial models predicted, the revenue evaporated, making it impossible to amortize their sunk capital expenditures before the cash ran out. [1]
It remains one of the classic textbook examples of how being technologically right can still lead to financial ruin if the rate of deflation outpaces the rate of market adoption.
i invest mostly in technology. With my best wishes for profitable investing.
The Captain