http://finance.yahoo.com/news/why-ubiquiti-networks-ubnt-cou…
bw
2 Likes
bridgewater, I believe Zacks Buy/Sell ratings are based almost purely on how company metrics compare to analyst expectations. When analysts are wrong to the downside, Zacks says Buy, and when analysts are wrong to the upside, Zacks says sell. So it’s very short-term oriented and based on what analysts are doing rather than what the business is doing.
Just my 2 cents!
Neil
4 Likes
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Not necessarily bad but to be taken with a pinch of salt. I see them more as eyeball catchers than as news. It seems a common practice on several investing websites.
Denny Schlesinger
2 Likes
“Not necessarily bad but to be taken with a pinch of salt. I see them more as eyeball catchers than as news. It seems a common practice on several investing websites.”
Yeah but!!! We have watched this stock price go down big time for weeks now. I started buying UBNT in July this year and have purchased many times on the way down. I am now down 31.8% and still dropping. At what point do you say that’s enough. On the other hand it’s so far down now it probably can’t go much lower and so Might just hold on and hope some day it’ll all turn around. It sure is a frustrating game we play.
Just venting a little because it hurts. Think I’ll go play golf.
Gayle
.
Almost every time I thought a stock couldn’t go much lower it did.
Hope is not a good basis for investment decisions, since “hope springs eternal” but stock prices don’t always rise 
Sell losers. Keep winners.
Nothing here necessarily applies to UBNT, but I have sold. Mostly because I realized I don’t understand the business or the competition. So I never should have bought it in the first place.
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2 years ago i stopped buying below my original purchase price to prevent catching falling knives. i know i may loose out on some deals, but the risk i avoid makes me sleep better.
i broke that rule on SZYM…with originally having gone in at 11, bought at 6…and now…i have 0 shares as i sold them all vowing never to break my rule again.
3 Likes
Just to clarify, my point was about Zacks, not about UBNT, a stock I have not followed. Sorry if I caused any confusion.
Denny Schlesinger
2 years ago i stopped buying below my original purchase price to prevent catching falling knives. i know i may loose out on some deals, but the risk i avoid makes me sleep better.
This is very similar to how I buy. Warren Buffett said of the stock market: “if you can keep from losing money you should do very well.” (That is a paraphrase.) And too, Yogi Berra said “Buy stocks that go up. If they don’t go up, don’t buy them.” There is a huge amount of wisdom in both quotes.
When I first buy shares of a company I buy just a partial position, which for me is between .25 and .5% of my portfolio. I will average down, but I only do this very seldom and I will only do it once. I know that process is based on the stock price rather than the business performance, but often times the two are tied together. And like you, I want to sleep. So it’s good enough for me.
Jeb
I will average down, but I only do this very seldom and I will only do it once.
My approach is slightly different. I will average down four or five times, in increasingly large amounts, and then, when the stock keeps dropping, get worried and sell it all to avoid even further losses.
This approach is probably not suitable for all investors, though.
LTC
6 Likes
Averaging down is good for the psyche. Because it delays the time you have to admit you made a mistake.
It is not so good for the pocketbook.
I do it gradually (because we all anchor re prices and the price we bought at has no significance to anything except in our own mind). And only in small amounts. And only when I have great confidence the underlying tides lifting all the ships in that field.I didn’t do it often.
Even then I am wrong maybe half the time. A few of those timesI just didn’t hold long enough. But I make enough when I am right to come out ahead.
.High conviction stocks are rare, I only own two now.
1 Like
And like you, I want to sleep. So it’s good enough for me
Given how many human biases we have, I genuinely wonder if doing what makes us comfortable is really best for our investing.
The classic example is price anchoring. We feel bad buying something for more than we could have, so we don’t buy at all and pass up an attractive price on a great company. People will justify this all kinds of different ways, but we all know that this behavior is very unhealthy for our long-term results.
There are a slew of other biases: recency bias, that causes us to chase heat; confirmation bias, that causes us to seek out opinions that agree with our own; pessimism bias; halo effect; ostrich bias; and the list goes on:
http://www.fool.com/investing/general/2012/10/18/15-biases-t…
We do these things because they make us feel emotionally good (or let us avoid feeling emotionally bad). But they’re detrimental to our investing success.
We do need to be able to sleep at night. But I also think it makes sense to take a hard look at what is driving our decisions and ask if they really make the most sense for our long-term investing results.
Neil
7 Likes
Wow! Very nice refections Neil. Thanks.
Saul
On the other hand it’s so far down now it probably can’t go much lower and so Might just hold on and hope some day it’ll all turn around.
Gayle,
My suggestion for you would be forget the price you bought something. It’s at the price it is now. If you think you should sell it, say to yourself “I’m fed up with this stock and I no longer like its prospects. Where else can I put the same money where it will do better?”
Takes a lot of the emotion out of the decision.
JMHO
Saul
7 Likes
High conviction stocks are rare, I only own two now.
I agree…Ok, which two?
Mykie
PS I’ll go first…AAPL, KMI and FB are the ones I am least worried about and yet have the highest positions in. I also have a lot of conviction with BSK B.
1 Like
the worst thing is that knowing about all these biases usually doesn’t keep you from having them yourself. Is there anybody out there that doesn’t have at least some degree of confirmation bias?
Using these biases makes you feel good, it’s built into our brains. The rational human being is a myth.
The person it is easiest to fool is yourself.
3 Likes
which two? Arcam and Tesla
Both high priced on a P/E basis, both riding a wave of inevitability. At least as far as the industry is concerned
.At some unknown point most cars will be electric ,at some unknown point a significant part of metal work for demanding applications will be done by additive manufacturing.
These are multi year holds. With Tesla we won’t know until we see how the Gen 3 sells, with Arcam we won’t know until we see how much the machines improve as a result of the multi millions the EU has spent on research.(free to Arcam, but Arcam gets the benefit),. So 2018 at the soonest. If prices fall due to a general market slide, nothing company specific, I will buy more.
I also believe more solar is inevitable but not sure about SCTY to consider it a conviction hold. I really don’t understand social media and if there was a trend an old geezer like me would be the last to know so don’t own FB.
I do own some AAPL, love their products but unsure if they will continue to be able to differentiate themselves as their products mature. I recently bought an iPad Air 2 , but would readily admit that it is overpriced for most. A near perfect tablet except for a mediocre display resolution.
I certainly would be interested in hearing from others on this board any really high conviction stocks. For this I want a great company but also a industry group almost assured of being a lot bigger 5 or 6 years from now. Because a rising tide lifts all ships.
3 Likes
Because a rising tide lifts all ships.
Except the wrecks, of course.
The Captain
I certainly would be interested in hearing from others on this board any really high conviction stocks. For this I want a great company but also a industry group almost assured of being a lot bigger 5 or 6 years from now.
While electric cars (Tesla & Leaf) are looking good, the industry as a whole has yet to “cross the chasm.” Lots of promising technologies have died in the crossing.
Energy is one commodity that will never go away but which product/technology for which application is a lot less certain as I have learned over the years dabbling in green alternative energy. Complexity is the enemy of adoption and lack of infrastructure is complexity. Based on that rule I give drop-in renewable biodiesel a high chance of success, cost willing, because it can use all the fossil fuel facilities. Ethanol and esther biodiesel can’t. Plug in vehicles can use the grid with some adaptation. Fuel cells, CNG and LPG don’t have infrastructure in place. Solar and wind can plug into the grid with the new technologies coming on line. A marine architect friend of mine just shook his head when I showed him a tide based generator.
OPTT http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.c…
KISS - avoid complexity!
Denny Schlesinger
1 Like
I certainly would be interested in hearing from others on this board any really high conviction stocks. For this I want a great company but also a industry group almost assured of being a lot bigger 5 or 6 years from now. Because a rising tide lifts all ships.
I would say Avigilon, AIOCF, this company is very cheap right now but in 5 to 6 years it should be a lot bigger. This is a highly fragmented market and is projected t reach US $23.2 billion by 2016. The new era of security cameras is digital with the digital cameras projected to grow at over 24% cagr to 2016. According to IHS research in a study done in 2012 the 15 largest suppliers accounted for 43.5% of the market in 2011 and no company commanded more than a 5.9% share of the market.
Avigilon has an end to end product that allows companies to monitor their business’s. Most of their competitors have either the camera, the storage system, or maybe the monitoring system but they are bolt on not the complete system. Avigilon will sell you everything and even show you how to run the whole system. I am very bullish on them.
Andy
Long Aiocf
5 Likes
Speaking to this:
the worst thing is that knowing about all these biases usually doesn’t keep you from having them yourself. Is there anybody out there that doesn’t have at least some degree of confirmation bias?
And this response, too:
Using these biases makes you feel good, it’s built into our brains. The rational human being is a myth.
This topic brings to mind a (small) study done in recent years that showed that individuals with impaired emotional response make better investment decisions.
Below two articles related to this phenomenon, and then a third on Michael Burry, an investing genius added by Aspergers Syndrome and its accompanying obsessive focus on detail to excel in the market!
okapimoon
http://www.dangoldie.com/Emotions.html
http://eml.berkeley.edu/~webfac/dellavigna/e218_f03/study.pd…
http://www.vanityfair.com/business/features/2010/04/wall-str…
2 Likes
" the industry as a whole has yet to cross the chasm." Certainly true. But this pre charms investing is where the big profits (and big risks) lie. Arcam is even more pre chasm…
But as almost anybody who has spent much time driving a BEV will tell you, they are just better, so what is slowing uptake is mainly cost.
Innovation classically comes from the bottom up, cheaper, simpler, but not always. The steam engine cost more than a couple of mules, the iPhone more than other mobile phones etc.
In any case these are the stocks I have most conviction in, as much or more for the industry as for the stocks themselves.
KNDI could be added to the BEV industry, and I own it, but it’s hard to have deep conviction about any Chinese company. I can’t find any good public companies to diversify the risk in the metal 3DP category. Even though I have conviction, experience has taught me to limit them as a portfolio percentage.
1 Like