1. By the time the NASDAQ reaches 6000, Britney Spears will have gray hair. I know I said the same thing about NASDAQ 4300 and 5000, but I will be right this time. Really. :) 2. By the time the DJIA reaches 12,000, Leonardo DiCaprio will be using Centrum Silver. 3. The DJIA, S&P 400, and S&P 500 will lose 85%-90% in the coming bear market. 4. The vast majority of Internut stocks will lose at least 99% of their value. (Just don't ask me which ones.) If bear markets are tornadoes, then Internut stocks are mobile homes. 5. At the bottom of the next bear market, all of today's bulls will have a mysterious case of amnesia when you try to justify the next bull market with low valuations and the productivity that technology brings. 6. NPK management will FINALLY scrap the dividend and sell products online. 7. Warren Buffett will buy NPK. 8. With or without Warren Buffett, NPK stock will skyrocket. Just don't ask me when.
FreeCashFlow has once again demonstrated his willingness to make predictions that are either wrong or boring.
Free, what you fail to understand about the internet stocks is the fact that they are supported by more than just the wackiness of the people buying the stocks. Many are optionable or contained in indexes or also have convertible securities outstanding. Thus, there is a vast amount of hedging underway and the price changes (up or down) are most welcome. Clearly many will fail simply because the business models are ridiculous, but that's not equivalent to investors taking a beating, which seems to be your mantra. Many investors have set the stage to profit from the coming declines in these equities. And if you care to know which ones are headed down, a good list to review was published in the latest Barron's.
Who cares if NPK sells products online? Don't forget they are not currently prepared to operate as an online retail operation. Not that they couldn't afford to attempt such a strategy, but the ossified management has no history for such departures from the tried-and-true. However, the tried-and-true has become the TIRED and true!
Warren Buffett wouldn't bother with an issue having such a small market capitalization and limited growth prospects. But if he thought he could get his hands on the balance sheet to shake loose some of the cash, he might give it a thought. But then wouldn't we all.
Free, one of the reasons stocks go up is investor enthusiasm for exciting corporate strategies. Even a kitchen utensil business can be exciting in the right hands. But NPK won't generate any excitement until the current management releases its stranglehold on corporate direction. You are right about the possibility of the share-price rising. It might eventually rise because the management won't last forever, and the change might spark interest. But the day might arrive when a foreign competitor rolls into town and drives NPK out!
Just kidding, just could not resist. I do not fully agree with either free cash flow or stockholderrevolt, but I am much closer to free cash. Here is where I agree and disagree:
1) The Nasdaq is ridiculously overvalued. I think certain sectors will lost 80-90% of their value. I just do not know when. Furthermore, prices could double from here prior to the decline beginning. In other words, I think free cash flow is much too confident that the Nasdaq will not reach 6000. However, the larger the bubble gets, the bigger ultimate fall will be when fundamentals return to the market.
2) The dow will not lose anything near what the nasdaq will lose. Many of the "old economy" stocks are attractively priced currently. While a meltdown in the nasdaq very well could bring the whole market down, another possibility is a massive sector rotation, where money fleeing from the nasdaq could flow to the currently unloved sectors of the market. We saw some of this in last weeks market. Nonetheless, even in a complete meltdown scenario, the Dow would lose nowhere near what the nasdaq would lose.
3) Stockholderrevolt's attempt to make the case that a meltdown would benefit many investors is riduculous. While a select number of investors would benefit from a market meltdown, the vast majority of the market is long these stocks, many on margin, and would be wiped out by a significant bear market. Those that would benefit would be an extremely small minority (maybe 1/10 of 1%, at the most).
4) NPK is a compelling value, and I hope (since I am long) that the stock price will at some point reflect this value. However, I believe (as stockholderrevolt does) that we have a managment that is completely uninterested in building shareholder value. Buffett plays close attention to allocation of capital, and the management of NPK have done a pathetic job of managing the capital of this organization. Rather than allowing the cash to sit in interest bearing securities, either a special dividend (and I am not talking .10 a share) or a massive stock repurchase program would be a much better use of capital. I for one would vote for repurchasing the shares at their current price. Since we are almost trading below our cash value, that would seem to be a good use of corporate assets. Until management catches a clue, this stock could languish below its intrinsic value for years.
I enjoy this board, at least the spammers dont bother to post here!