SILC

[yukiii]

If you sell now, knowing you'll buy back later at a lower price, you'd still have to follow the money manegement rule. The profit on SILC would be divided by 15 and added to the original investment on SILC. Therefore, by the time SILC reaches the price you've sold at, your capital value in SILC will be lower than it is now. This means that if SILC is to grow to $65, your end profit will be smaller. Add a prospect of you manipulating SILC a couple more times before it gets to the target and you'll end up having a lot less profit than you potentially could.

If everyone knew that SILC would reach 65, nobody would sell.  There are no guarantees in the market and we all have to take the data we have and make a decision.  I saw a good but not great quarter and felt that the results could not support the current valuation. 

Always take your profit and buy back at a lower price, that is the norm, never hold small caps long term.

[kpunarc]

i don't understand these stocks. still a good quarter with 85% revenue increase and the stock plummets...just doesn't make sense to me

[berloga]

>If everyone knew that SILC would reach 65, nobody would sell.  There are no guarantees in >the market and we all have to take the data we have and make a decision.  I saw a good but >not great quarter and felt that the results could not support the current valuation.

Nobody knows where SILC will be in 6 months. The problem is if you sell, how would you gauge the situation for the next entry point? Based on technical analysis? But then, you can decide to finally get back in and the stock can go down more before it takes off again. This will make you nervous. Also, like I said, you will never make more money on swing trading than a good long term investment. There have been many examples to that.

Lastly, buddjas1, please share your evaluation model. Since you belive SILC is overvalued or does not hold up to its current valuation, then what is it worth for and how low should it go before you'll consider it attractive again (meaning dropping how many %)?

[berloga]

Must find a support at $22.

[buddjas1]

>Lastly, buddjas1, please share your evaluation model. Since you belive SILC is overvalued or does not hold up to its current valuation, then what is it worth for and how low should it go before you'll consider it attractive again (meaning dropping how many %)?

$.22*4*25=$22

I'm not sure SILC deserves a higher PE multiplier than 25, at least not based on Q1 results.  I would think about buying again perhaps under $20. 
I think SILC is just an example of a stock that got a little to ahead of itself.  I'm sure there will be a nice run up before Q2 release, but I don't have the patience to wait until then.

[yukiii]

i don't understand these stocks. still a good quarter with 85% revenue increase and the stock plummets...just doesn't make sense to me

SILC was overvalued and earnings were great, but not good enough to support the price.

[David Randolph]

Always take your profit and buy back at a lower price, that is the norm, never hold small caps long term.

Sure yukiii, do you think you'll be able to buy back SILC below your selling price around $15?

Sold today nice gain
Thanks
David

Thanks

[yukiii]

DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.

I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.

I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits?  Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.

[Se7en]

DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.

I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.

I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits?  Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.

If you didn't sell at 9$ but now, your profit(s) would have been a lot more ... 

[David Randolph]

DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.

I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.

I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits?  Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.

yukiii, I'm compounding my profits, are you?

40 years is a very long time. If you had started with the paltry sum of $1,000 and had an average annual return of 30% with your swing trading, you would now have $36,118,864 in your trading account. That would make swing trading now nearly impossible or not worth the effort.

Most big caps started by being small caps.

I have 40 years of investment ahead of me (barring health problems) and I want to achieve a 30 - 40% average annual return on my investment, and the only way to do that in a consistent manner is by applying and respecting a long term investment strategy.

Honestly, I bet you wish you had my strategy 30 or 40 years ago. I'm sure you would be so rich now you wouldn't care about short term movements in stocks, you would be too big to take advantage of them.

Thanks for the nice talk and advice yukiii, I want to know and learn from your experience.

[buddjas1]

There is a difference between "long term holding" and holding a stock for a long time while ignoring a change in the fundamentals.  I would have held SILC through today if I had thought that the fundamentals demanded that.  However, the fundamentals changed and it no longer made sense to hold the stock "long term." 

I think David is correct that long term holding is the best strategy; but that strategy should not be followed blindly.  The investor must account for a change in the data.

[David Randolph]

I knew a sell off would happen today:

I see the stock opening higher and if I were a short term trader I would certainly take profits.This is one of those cases where there's about 90% probability of the stock going down after today's gap up.

I feel the pressure to take profits, but since probably I would be recommending buying the stock again $2 or $3 below current levels, I'll keep on holding SILC.

And yet, I've opted to keep the stock anyway. I know that being in and out of stocks won't take me anywhere over the long term. Short term satisfaction of "cash in the pocket" goes against being the long term successful investor that I want to be. Why?

There are many reasons, which aren't easy to explain. One is "start acting like you were what you want to be". Big sharks don't do swing trading simply because they're big. They know what they buy and why they do it, and don't sell to buy 10 or 20% lower, if they think the stock still has a lot of bags in the tank like I do.

If you sell now, knowing you'll buy back later at a lower price, you'd still have to follow the money manegement rule. The profit on SILC would be divided by 15 and added to the original investment on SILC. Therefore, by the time SILC reaches the price you've sold at, your capital value in SILC will be lower than it is now. This means that if SILC is to grow to $65, your end profit will be smaller. Add a prospect of you manipulating SILC a couple more times before it gets to the target and you'll end up having a lot less profit than you potentially could.

Excellent point on money management rules berloga, applaud.

There is a difference between "long term holding" and holding a stock for a long time while ignoring a change in the fundamentals.  I would have held SILC through today if I had thought that the fundamentals demanded that.  However, the fundamentals changed and it no longer made sense to hold the stock "long term." 

I think David is correct that long term holding is the best strategy; but that strategy should not be followed blindly.  The investor must account for a change in the data.

Sure buddjas1, but there wasn't any major change in fundamentals in my view. The quarter wasn't as strong as we hopped for, but it wasn't weak either:



Twelve quarters in a row of strong revenue growth. Are you going to fight this trend? Revenue grew 20.57% sequentially, from $5,017,000 in Q4 2006 to $6,049,000 this quarter. If this growth pace continues throughout 2007, the company will end the year with revenue of $32,738,145, that's more than 100% growth from the 2006 revenue number of $16.1 M. Maybe I was too fast in adjusting my revenue CAGR estimate from 2 to 1.84, the company seems on track to achieve 100% revenue growth in 2007.

I know, I know, "but diluted EPS grew just 2 cents, from 20 cents in Q4 2006 to 22 cents now". And what if I tell you that EPS declined from 11 cents in Q1 2006 to just 6 cents in Q2 2006? Given your current mindset, you would immediately say "sell". Back then the stock was trading at $5.

I'll keep holding SILC all the way through the ups and downs until I'm convinced the company reached its full long term potential. Just a $118 M market cap now, still a long way from that point in my view.

[ravenquork]

DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.

I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.

I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits?  Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.

yukiii, I'm compounding my profits, are you?

40 years is a very long time. If you had started with the paltry sum of $1,000 and had an average annual return of 30% with your swing trading, you would now have $36,118,864 in your trading account. That would make swing trading now nearly impossible or not worth the effort.

Most big caps started by being small caps.

I have 40 years of investment ahead of me (barring health problems) and I want to achieve a 30 - 40% average annual return on my investment, and the only way to do that in a consistent manner is by applying and respecting a long term investment strategy.

Honestly, I bet you wish you had my strategy 30 or 40 years ago. I'm sure you would be so rich now you wouldn't care about short term movements in stocks, you would be too big to take advantage of them.

Thanks for the nice talk and advice yukiii, I want to know and learn from your experience.

Just to put a perspective here, SILC is just about where it was three days ago.  The data does not seem fundamentally changed at this point.  One quarter doesn't make a trend, unless there is a substantial change in the Company. SILC is still growing into new markets and has invested in the personnel and marketing to continue growth.

yukiii - what do you see as fundamentally different?

[yukiii]

DAVID
I was in SILC back when it was $4 sold at 9 went back in at 7 then $15. But that how I trade.
I learned along time ago to book your profits in small caps as they always correct when they get ahead of there value.

I think you are fooling yourself if you think that you can keep a portfolio of 10 small caps and keep them over time.

I would set reasonable values then sell and buy other stock ready to rise, and keep the cycle going.
Sure you can keep some of your over valued stock if you want, but you just can't sit on these profits or they will go down.
Why not compound your profits?  Just some advise, I've been doing this for 40 years. I am not knocking you or your research, I just think ther is room for improvement.

yukiii, I'm compounding my profits, are you?

40 years is a very long time. If you had started with the paltry sum of $1,000 and had an average annual return of 30% with your swing trading, you would now have $36,118,864 in your trading account. That would make swing trading now nearly impossible or not worth the effort.

Most big caps started by being small caps.

I have 40 years of investment ahead of me (barring health problems) and I want to achieve a 30 - 40% average annual return on my investment, and the only way to do that in a consistent manner is by applying and respecting a long term investment strategy.

Honestly, I bet you wish you had my strategy 30 or 40 years ago. I'm sure you would be so rich now you wouldn't care about short term movements in stocks, you would be too big to take advantage of them.

Thanks for the nice talk and advice yukiii, I want to know and learn from your experience.

Just to put a perspective here, SILC is just about where it was three days ago.  The data does not seem fundamentally changed at this point.  One quarter doesn't make a trend, unless there is a substantial change in the Company. SILC is still growing into new markets and has invested in the personnel and marketing to continue growth.

yukiii - what do you see as fundamentally different?

Many of these stock get way ahead of there value, in my opinion SILC growth will slow down and PE will go lower, so get out on the big run up or before.
SILC .49 2006 2007 .88 est  don't think 2008 will be more then 1.00 so as you see growth will slow.
But what do i know? the story is already out...........

[buddjas1]

"Twelve quarters in a row of strong revenue growth. Are you going to fight this trend?"

Maybe I was a little pessimistic.  I'll listen to the cc over the weekend and decide whether to re-buy then.