For those of you who suffer from attention deficit disorder, AAPL sold for less than 9 bucks just 3 and a half years ago. And the number “2209” is not made up either – that happens to be the number of stocks selling between 1 and 9 dollars yesterday. And for each of those 2209 stocks there is one hell of a story. Believe me – I’ve heard most of them.
Now take a close look at this chart of AAPL that I have laboriously annotated for your viewing pleasure. Soak in the many lessons to be found on the chart. It is a cheap stock clinic. If you see similar set-ups on the monthly basis in your favorite cheap stock you can be pretty certain that it isn’t going to stay cheap for long. But if you are buying because it’s an “idea” stock (as in - I have an “idea”) you better be using “mad money.”
Don’t get me wrong – every once in awhile one of these guys catches a bid and takes off, you just never hear about the other 1000 that didn’t.
My advice (which is free so you get what you pay for) – leave the cheapies to the dreamers and the fools (and I’m not talking about the Motley ones either). If the stock sets-up go for the home run – otherwise remember rule 1 – nobody knows nothing – including me.
4 comments:
There was a 2-for-1 split in February 2005, so it never actually traded at 9 in 2003. Looks like the absolute low in 2003 was around 12.50
True
Price growth and trend is not a function of stock price.
Examine your biases before you make such absolute statements. Worse you might be missing out on profitable opportunities because of your wrong assumptions.
If you do research properly, you will find lower price shares have higher leverage because they tend to be mispriced more. There are several studies which show this.
I have neither the time nor the energy to argue - believe what you wish and I will believe what I wish. There is plenty of money in the market place for all of us.
OK?
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