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Echelon Corporation (ELON) Message Board

  • queen_anne_22 queen_anne_22 Aug 20, 2007 7:09 PM Flag

    Is buying elon investing or gambling?

    The posters here don't cease to amaze me. There are some here who seem to know what they are getting into when they buy elon. They understand risk.

    But then there are others who feel vindicated when the stock goes from say $22 to $28 in 1 week. They feel that the price appreciation means that they had the right investment strategy all along. I believe, that is the wrong way of thinking. In the words of the great investor, Warren Buffett, the stock market is a voting machine in the short run and a weighing machine in the long run. So when the price goes up quickly that does not mean much to me. If you go to Vegas and see a gambler make $1000 by betting on red in roulette that does not make them a savvy or smart gambler - just lucky. In the long run that gambler will most likely lose money. You wouldn't want to copy the gambler - would you? If you look at studies, it has been shown repeatedly that investors who move in and out of stocks do significantly worse that the ones who pick good companies and stick with them. I have no problem with people who have picked elon and are in it for a long time. Microcap, for example, appears to be one of those investors. But unfortunately, most people here talk about technical analysis, resistance, and are waiting to unload their stock and then buy again. The huge volatility of elon confirms that observation. Short term traders will get burned, but their brokers love them.

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    • Hey Queen_anne_22/922,

      Have you finally figured out the difference between "Market Order" and �Limit Order�?

      Re: Analyst
      Seattle, WA
      31-May-07 04:04 pm

      �Unfortunately initially I gave "Market Orders" which meant that if I was buying 2000 shares the price would escalate just to fill my order.�

      Is this too good to be true?
      Seattle, WA
      14-May-07 10:24 am

      �I just doubled my position to 4000 shares. I've been studying this company and it really appears to be a great deal at even $10 per share.�

      I am wondering how many Queen_annes are out there?


    • Johnmr and elonlong,

      I'm just like you folks. Trying very hard to beat the market with my investments. We just have different approaches. I think that I could learn something from you either in investing or psychology. Lets put hostility and sarcasm aside and learn from each other. That is what's so great about the internet. Sharing and learning. I think you can learn from everyone no matter what their investment skill. I originally came here to gain insight into why people buy a stock with such poor financials and I actually am learning that there are valid reasons to invest in elon. Of course, I am far from actually putting money in this risky company. Hey, in 3 years this company could be worth $200 a share and I will be proud of you folks.

      Good luck and I mean it!

    • I dunno ur highness u tell me. Today (08/23/2007) it looks very much like a successfull business.

    • Strong Buy! See above for details.

    • Twincity, your sarcasm hurts me.

      You are clearly very savvy if you have made 200K on elon trading in the past year. I assume that your original investment was not much (under 200k maybe?) That's a 100% return on your investment. Obviously my comment was not directed at shrewd traders like yourself. I am extremely impressed by your performance. If I buy elon like you did now when should I sell? What signs do you look for selling? Also please confirm my assumption that your original investment in your Roth account was not much. After all if you have 20 million dollars in your Roth then 200k is only a 1% return which is not impressive. But I am sure that is not the case. 200K on elon in one year! That is amazing! Are you this succesful with all your picks or just elon?

      Please note everyone that I have changed my sentiment to "strong buy" from "strong sell".

    • Oh thank you wise queen. I am glad you enlightened me as to the horrible risks of investing in Echelon. That 200k gain in my Roth IRA from just Echelon over the last 12 months sure is hard to live with. I am never going to "gamble" again. By the way, I am back in with 1/2 my original position at an average cost of around $22 and looking to add to my position on any weakness. We'll see what happens. I sure hope little old dumb me doesn't get taken for a ride.

      All hail the queen!!! She seems to know it all.

    • Every aspect of virtually every business is a gamble.

      Look at the statistics describing the percentage of new businesses that fail. Would the couple who start a new restaurant do so if they had a clue?

      Look at how all stocks failed in the wake of 911....

      The capitalist system takes no prisoners. Some businesses are on government life support, but most struggle in the open arena, and are free to fail.

      Just remember, "An investment is a stock (that after your purchase) went down."

      What the professor is saying is, every stock purchase is a speculation... that is: a gamble.

      If you can't take the heat, get out of the kitchen. The beauty of this whole capitalist enterprise, is that it is purely voluntary.

    • Speculating.

      You may as well go to the California hills and pan for gold.

    • >>If you look at studies, it has been shown repeatedly that investors who move in and out of stocks do significantly worse that the ones who pick good companies and stick with them. I have no problem with people who have picked elon and are in it for a long time. Microcap, for example, appears to be one of those investors.<<

      Afraid not. I believe in buying stocks when lower than my estimate for their fair value and selling when higher. My strategy is somewhat more complicated than that, but not much. I probably hold my average position for ~ half a year or so. I've traded ELON since 1999 and made a lot of money doing so. If I had bought in 1999 and just held on, I might have been up a bit, but not nearly as much. By rebalancing and constantly redeploying capital to the most undervalued opportunities in one's investment universe, one can maximize return.

      I've seen some of the studies you are probably referring to, indicating that those who 'churn' their brokerage accounts do worse than those who don't. I expect that is because the great majority of those people have no clue as to the intrinsic worth of the stocks they are trading. They are trading on bumps in charts, pie-in-the-sky potential, sexy PRs & articles, and 'hot trends' rather than brass tack fundamentals and hard-nosed valuations.

      There are probably many strategies that work. I'm very happy with mine - but it certainly isn't buy and hold independent of the stock price.


      • 1 Reply to microcapfun
      • Microcap,

        Very interesting. How do you calculate the intrinsic value of the companies? Could you give some examples with real companies? What is Elon's intrinsic value in your opinion? What calculations do you make? Present value of future net income or what?

        I think buying companies below their intrinsic value and selling when they rise above their value is the way to go. But easier said than done. Also do you take into account the effect of taxes? Shorterm capital gains tax can really eat into your profits.

        I had you pegged wrong. I thought you were a longterm elon investor.

    • Anne, something is keeping you here. I am so intrigued by people like yourself and chipsteak, who have no financial interest in the stock, yet take the time to post all the reasons not to invest in it. Why echelon? There are literally thousands of stocks that should not be purchased based on fundamentals and financials. Are you sure youre not a closet trader? If so, you should come out of the closet and just be yourself. Its much healthier. And if Echelon is a "strong sell", as you have pointed out, why don't you sell short? You can make a bundle while the rest of us suckers lose our shirts. We won't hold it against you.

      • 1 Reply to johnmr12
      • Johnmr,

        Here are your answers:

        You are intrigued by me - I am intrigued by elon speculators. You're right there are thousands of stocks that are not worth investing in. I think one can learn a lot by watching poor investments. Of course, I realize that I could totally be wrong and elon could turn out to be a great investment. In that case I could end up learning a valuable lesson. If it turns out terrible, then that is also a valuable lesson about human behavior. It is very educational.

        >>Are you sure youre not a closet trader? If so, you should come out of the closet and just be yourself. Its much healthier.

        I'm too much of a chicken to be a closet trader. If I were, I agree that it would be much healthier to come out of the closet.

        >>And if Echelon is a "strong sell", as you have pointed out, why don't you sell short?

        The reason I don't sell short is because:
        1)I believe you can never predict people's behavior especially in the short term. The stock could get bid up to $80 by the end of the month, but that may not necessarily reflect the company's success.
        2) I admit I could be wrong about elon. I have been wrong before and will be wrong again in the future. Selling short is way too risky. The potential downside is infinite (ie: if the price goes through the roof) while the potential upside is finite ($22 a share if the comapny goes under). As I said before, I'm too much of a chicken for shorting.

        Finally, Johnmr, microcap and purobreath, you all seem like longterm investors in elon, so my criticism was not directed at you. I was talking about the folks who are constantly trading in and out of this stock.

        Hmmm... maybe I should leave this board. Except you all are very fun! So easy to get your goat. If you want, I will tell you the companies that I am heavily invested in and you all can come to those boards and talk trash about the companies. Fair enough?

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