The market is the final authority on price - what you pay for something. It's not the final authority on value - what you get for the price. What you pay for something is not always what it's worth. Hypothetically, if Skullcandy paid $2 in dividends per share every quarter, and was trading at $1 per share, the price of it is only $1, the value of it, on the other hand, would be much higher. I couldn't care less what the market says the price is if I believe the value of it is much higher - eventually the market will catch up.
And while saying that the longer your capital is invested the longer it is at risk is technically correct, it is entirely misleading. The longer it is invested, the lower your risk becomes. The fact is, with stocks, the odds are in your favor - chances are you will come out ahead in the long run if you buy and hold. It's like playing in a casino where the odds are actually in your favor - yes, the longer you stay in the casino, the longer you are risking your money. But also, as long as you are not betting your entire stake on each game, the longer you stay in the casino, the less likely you are to leave with less money than you came in with.
You've elequontly expressed our differences. I belive the market is the final authority on price....because it is what it is. You believe the market is generally always wrong but eventually catches on and for a few brief moments in the history of the company the market gets it right.
The main reasons I cannot accept your paradigm, your model, is twofold. One, the information needed is inadequate and others know more and know what is actually made public earlier, ergo Enron. Two, the longer my capital is invested the longer it is at risk.
'NO. The asking price is $15.01 as I type this.'
How silly you are becoming. The trading price is the market's best guess as to the present value of future free cash flows. The market is wrong in the short-term all the time but is deadly accurate over the long-term.
'Sort of sophistificates your gambling habit, makes it sound, almost, religious'
I make investments. I absolutely hate gambling.
I don't want to influence your thinking as that would be a waste of time. I also won't make broad statements with certainty like you are willing to do. I'm far less confident about how skullcandy will perform than you are but I simply believe that they have a reasonable shot at becoming a big time brand over the next 5 years. On this basis I am 100% sure that I have you outmatched. Over the next few months to a year perhaps you'll guess correctly over me.
OE I respect your opinion regarding Technical analysis, I will take all the help I can get to increase my odds. My problem with you is the statements you make such as Radio Shack liquidating Skul products and most recently "You recoginize that management was clearly involved in the CFO shakeout and so you're beginning to formulate strange foreign ideas." It's already been documented that Mitch's position as CFO was temporary from the beginning. He's a transient and enjoys helping set up new company's and than moving on. Your misinformation tactics put a big warning sign over your true intentions, whatever they may be.
The resignation of Skullcandy Inc. Chief Financial Officer Mitch Edwards caught Wall Street investors off guard Monday, but Mr. Edwards said he started discussing his departure with the high-end headphone maker shortly after its initial public offering in July.
"I've developed this niche helping late-stage private companies prepare for a liquidity event," like an IPO or an acquisition, Mr. Edwards said in an interview Tuesday. Skullcandy is the sixth such company he has worked with since leaving a career as a lawyer roughly 15 years ago."
Mr. Edwards said he and Skullcandy agreed the timing of his departure was right because the company had released its fourth-quarter results and had finished preparing its 10-K annual filing. It also was planning a series of investor presentations, which started Tuesday, and both parties felt it was appropriate to make the announcement before they began, he said.
<<<The business is only worth the present value of its future free cash flows. Nothing more, nothing less.>>>
NO. The asking price is $15.01 as I type this.
<<<...Now realize private companies and public companies add value to owners in the exact same way.>>>
What tired stuffy language, "add value to owners". Sort of sophistificates your gambling habit, makes it sound, almost, religious.
Answer the clue phone, it's for you.
'But by now, doubt is creeping in....you can't deny it.....you're beginning to wonder if the game really is fair.'
Dude save the exercise on your fingers. Try and convince yourself about your beliefs.
The business is only worth the present value of its future free cash flows. Nothing more, nothing less. If you were the CEO of a private business and you owned 100% of it there is no doubt where you would allocate your time. You would pursue growth and expansion if it could be justified on terms you felt were reasonable. You would stay in tune with market trends and try to keep big customers happy. You wouldn't have any charts or market prices to wonder about would you? Now realize private companies and public companies add value to owners in the exact same way. I have little doubt that mgmt at skullcandy is focused on fundamentals much in the same way I am.