I’m not sure I’d give BOFI a thumbs down anyway, as my guess is that it’s more than likely (more than 50%) that the company will eventually do very well. It’s just that there seems to be a lot more risk than I, for one, am comfortable with.
I guess that I didn’t really make this clear, which was certainly my own fault, although I did say often that everything might turn out well for people who stayed in it. It makes me sad though, that people can get so angry because someone has a different opinion about a stock than they do. Some people are very skeptical, for instance, about SWKS and SKX. I listen to what they say, and decide whether or not they seem correct, but it never occurs to me to be angry about it. In fact it’s different opinions expressed on this board and in other places that have caused me to sell out of various stocks that I have sold out of along the way. I acted on the negative things they said when they seemed to make sense.
As I wrote those last two sentences I thought that perhaps the difference is that I am always prepared to change my mind about a stock if necessary, which seems to be an oddball point of view. Most people seem to feel that once they are in a particular stock they are committed to defend it no matter what. I guess if I felt that way, I’d be angry too if people criticized one of my stocks.
Best to you all,
Amen Saul. They are stocks. They are not your children.
I imagine that your ability to be willing to be wrong on a stock is highly correlated to your market out-performance.
As I wrote those last two sentences I thought that perhaps the difference is that I am always prepared to change my mind about a stock if necessary, which seems to be an oddball point of view. Most people seem to feel that once they are in a particular stock they are committed to defend it no matter what. I guess if I felt that way, I’d be angry too if people criticized one of my stock
The worst of my investments and my trades have been the ones where I didn’t cut losers fast enough. The only saying “Never let a trade turn into an investment” is a good one if you have a shorter time frame.
I know most people here don’t use shorter time frames, but it also works the other way. It can be a great idea (and much cheaper) to let an investment turn into a trade if you decide that your original thesis was wrong.
Invest to make money, not to create a religion out of the process (e.g. 3-5 year holding period before reassessment)
Most people seem to feel that once they are in a particular stock they are committed to defend it no matter what.
You seem to be saying that those of us that are still long BOFI are doing so for some irrational, emotional reason.
We invest in stocks because we believe that the potential reward outweighs the potential risk.
This can change if the fundamentals of the business change and we then need to re-evaluate.
Many of us here have looked at the case put forward by the shorts and decided that it is essentially mud-slinging designed to spread fear uncertainty and doubt. The fundamental revenue drivers of BOFI’s business have actually strengthened and, from our point of view, that makes BOFI more compelling on a risk reward basis with regard to the current price point.
I can’t speak for others, but I would be surprised if any of the contributors on this board are still in BOFI because they feel ‘compelled to defend it no matter what’.
You could argue that the weakness in Skyworks was due to a more credible, fundamental threat to the business - a downturn in cell phone sales that will have a real impact on revenues.
As it happens I place more faith in management’s guidance than I do in analyst channel checks.
But I would ask you to respect that if someone disagrees with you about the outlook for a particular stock it is not because they have some emotional, irrational reason, but because in their intelligent, and thoughtful assessment they have reached a different conclusion to you.
I want to add to that.
Changing ones mind given new facts and data is totally rational but in the case of stocks it is not that simple. It depends on what you or the media decide to focus on and if that is at all relevant or accurate at all. The other aspect of this is how you view of the overall timeframe.
There will always be an endless list of pros and cons but it is impossible to weight them out and come out with a ‘right’ answer because some will weight one things more than another.
The other thing is no one can really know the future. We try to extrapolate based on past and present. But things don’t happen that way and even if they do for some time they may not have happened for the reasons you were thinking about.
Frankly I think Saul is bouncing his ideas off on this board and he is also trying to figure this out.
Saul- you may say otherwise but I think you came back to BOFI for two reasons:
you really believe that it is now a bad investment and you urge your sometimes too eager followers to let it go like you did. You can also have a good ‘I told you so’ maybe a couple of years down the road.
you still have a little voice that tells you BOFI could still be a big winner in the next few years but you want some validation or some additional dismissal of that idea. You want to see more strong cases for long BOFI. If not, you would feel reassured that I made the right decision.
who knows? ‘flip a coin’ sounds not serious at all but maybe that’s the way these things really are.
I really do think the odds are that Bofi will do just fine, will report good earnings and eventually this will blow over, or that the things that prove true in the accusations won’t be important enough to affect the future of the company. However, I just don’t feel comfortable with all this stuff going on. I still remember all those little Chinese companies that MF Global Gains recommended and I invested in, and how the Global Gains advisors went to China, and visited, several times, and spoke in person to the principals, and inspected the factories, and came back and reassured us, over and over, as we became more and more concerned, and how ALL these companies, (or almost all, I don’t remember clearly enough to say all), turned out to be frauds and scams. I was in 13 I think, in small amounts, and 11 were fraudulent by the time I quit watching. I think that experience has affected me and made me less accepting of reassurance, rationalizations and excuses for behaviors that seem questionable. It may make me miss a nice bounce in Bofi, but so be it.
Anybody else remember Satyam computing? Another SA rec that turned out to be totally fraudulent. And then I too was in Chinese Green Agriculture or something like that. Very smart people got completely bamboozled. Being somewhat risk averse isn’t a bad trait in investing.
yes that’s what could happen.
The other thing that could happen is that BOFI becomes a multi baggers in the next few years.
Take your pick of outcome and find some unrelated and random example to support either way.