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Making money by shorting a stock requires one of four things:
(a) an ability to successfully predict the near-term price fluctuations of the stock,
(b) awareness of an Achilles' heel for the company that is not yet publicly known and is not currently reflected in the share price,
(c) a basic insight to the effect that the stock or its sector is grossly overvalued and is in bubble mode, or
(d) pure luck.
I have absolutely no aptitude for (a), and I suspect that most people who claim to be able to repeatedly do (a) are not really able to do it with any more success than would be achieved by pure chance.
A few people are able to do (b), but this requires either insider knowledge or a lot of detective work. If someone here knows an Achilles heel for OVTI that isn't currently publicly known, I'd appreciate it if they'd share it with the rest of us. Of course, the people most likely to discover such an Achilles' heel are usually skilled hedge fund managers who don't waste time posting on message boards. And they have no need to bash the stock because they know that the Achilles' heel they've discovered will eventually cause the share price to drop a lot. Over the last couple of years, some people here have claimed that new products or technologies from Samsung or Aptina or Sony constituted an Achilles' heel for OmniVision, and that one of these competitors would soon crush the company, but this hasn't happened yet.
An awareness that a specific stock or an entire sector is in bubble mode (c) is something that a wise person can achieve pretty easily. However, even a wise person can have a hard time pinpointing the top in real time. In late 1999 and early 2000 it was pretty clear that most types of technology stocks were grossly overvalued, but if one had shorted a basket of tech stocks in late 1999, one would likely have been forced to cover at a loss while the NASDAQ continued to rocket upward over the next few months, even though his basic thesis would soon be proven right. At the moment, OVTI doesn't appear cheap to me. But at the same time it doesn't appear to be grossly overvalued or in bubble mode, either. Maybe OVTI will go into bubble mode one day, but it ain't there yet.
One can make money by shorting based on pure luck (d), but it's hard to make luck work for you repeatedly.
goutah you may be an investor, but, as you admit, you're no trader.
first, sam, sony and aptina are now ahead of ovt. aptina owns the phone space based on revenues, sam's catching up with it, and sony beat ovt on revs (not units sold) regardless of end market. and the combined effect of all 3 competitors is just getting started.
among other indicators and based on current industry research, i use a combination of "overbought" indicators and max/current pain to decide when to short and when to cover. use to document my moves on these boards. rarely lost but i wait for tons of hype and overbought to short usually based on a rumor that's circulating or an anomaly that can't be explained (like how come w/ huge increase in revs and proportion of highest resolutions sold, how come asp only rose from 1.29 to 1.37 and margins--considering inventory writedowns--remained flat?)
in the past, in retrospect, when you criticized tina for having a sell on ovt when it was at 10 down to 4, i kept thinking, does goutah know the meaning of "hindsight is always 20/20?" at the time, i did not agree w/ tina (i was shocked it got below 10 but it seemed like it wanted to go lower and i'm not one for fighting a trend on huge volume) but i understood why she felt that way.
now, i see the competition mounting and no more drawingboard tech to hype. i feel ovt may have seen its best days. jmho.
the blowout q2 and q3 guidance a few months ago did not seem to elevate the price even though a lot of chip peers were making new highs daily. that should mean something to you. and lastly, a lot of traders view a hold as a sell and go find something worth buying (something you'd categorize as a buy v. hold).
but i still enjoy reading your post. enjoy your day nelson. :o)
>> goutah you may be an investor, but, as you admit, you're no trader. <<
That's for sure. I'd be broke by now if I were a trader. I have no aptitude for trading.
>> in the past, in retrospect, when you criticized tina for having a sell on ovt when it was at 10 down to 4, i kept thinking, does goutah know the meaning of "hindsight is always 20/20?" <<
Well, it wasn't entirely hindsight. When OVTI was trading in the single digits in late 2008, Tina rated it a "strong sell" (not a simple "sell", as you claim). Even the most cursory fundamental analysis of OVTI at the time would have led any reasonably intelligent investor to declare that OVTI, despite whatever troubles it was having, was severely undervalued at $4 or $5 or $6. Tina's "strong sell" rating during that period caused me to conclude that her connections with the realities of investing were pretty shaky. Not so much because her advice was eventually proven wrong (which can happen to anyone who gives advice), but because it was so abundantly clear at the time that OVTI was severely undervalued and was therefore a good medium-term investment. I therefore heavily discounted her subsequent ratings of the stock. To me, rating OVTI as a "strong sell" at $4 in December 2008 was equivalent to saying that the earth is flat. A person who makes such a ridiculous assertion loses a lot of credibility.
So has Tina regained her credibility with he subsequent calls? Not really.
During the 2.25 years since OVTI bottomed at $4, Tina has been more or less constantly predicting the imminent downturn of the company's business operations and its stock price. During that same period, OVTI's quarterly GAAP EPS has risen from ($0.36) to $0.75 and the share price has gone up more than 600%.
Yes, Tina does from time to time still post some interesting news from the world of image sensors, and I read it. But I consider her ratings of OVTI to be noise. At some point OVTI's business operations and share price will peak out and go into a long-term decline, much as Tina has been constantly predicting. But I have no idea when that will happen. Nor does she.
Eric, what do you think about OVTI management's comments about not having forseen the size of their market moving forward? The guy who posts as the Tinas could have been short anything and been correct when OVTI went from 10 to 4. Also if you are correct and OVTI's future is not that bright what does that have to do with the share price jumping 30%+? As my brother once asked me "do you want to be right or do you want to make money?". Good luck in your trades and don't let hatred cloud your judgement.