VISA IPO & LULU
http://www.economist.com/daily/news/displaystory.cfm?story_id=10753463&top_story=1
Well, here's the IPO I've been waiting for for 20 years! If Mastercard is any indication, I suggest we keep a close eye on this for a buying opp on a post-IPO dip.
Well, what can I say about Lulu? THis is the most volatile stock I've ever seen! I also bought RIM around the same time last year and these 2 have taught me about lots about investing with and against the *tradewinds*. Smartphones are the growing like weeds and RIM is the market leader so it's pretty easy money. Meanwhile, as the chances of a US recession went from 50-50 last fall to almost certainty today, the Consumer Discretionary sector has been hit hard, and Lulu was not strong enough to swim against the current. I'm still expecting good earnings but market sentiment is a tough battle to fight. We could sell into the next rally, but we may have hit bottom already....
Where is Eddie this week? I'll be in San Diego until Thurs. Next week I'll be in Dallas Mon to Wed. I wish I could contribute more but right now I'm just trying to stay above water. BTW, Costa Rica was very nice, especially compared to Feb in TO!
posted by Junk Bonds @ 2/25/2008 11:17:00 PM
2 Comments:
Yes LuLu's volatility is quite something. I'm not sure the underlying reasons for why we bought LLL have changed all that much so I would suggest stomaching the ups and downs (or even trading it!)
Not to pour water on the hot VISA IPO but I found this article in the NY Times http://norris.blogs.nytimes.com/2008/02/25/visa-bailing-out-the-banks/
If the IPO coincided with a retrenchment of the US consumer, then there may well be a post-IPO dip.
Waiting for the next shoe to drop.....
Let's revisit the underlying reasons why we purchased LLL. If we still believe in the growth potential in the long run then we should not be concerned about the volatility. We knew that LLL was volatile. Let’s ignore it.
The problem is that the there is not enough data about stocks like this. It moves pretty much based on momentum and rumors. Eddie maybe you can help by revisiting the original argument.
If the problem is only the increased chance of recession (from 50% to 100%) still may not be a good reason to sell. Everyone knows that, and it is already reflected in the current price. So we do not gain much by selling now.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home