Thursday, April 15, 2004

My stock lose 30% since March.

Two bloody lessons that I have learned.

1) Do not buy stocks with some disappointing statement, such as "audition problem" or something like that. Investors are really sensitive to those kind of messages. You may exepct a big loss later when the message become true. For example, NT and PROX dropped a lot when they announced financial statement with problems. When the messages become true, in earning statement, the stock drop deeper.

2) Do not buy stocks before the earning announcement. It is like a gambling. For exmaple, BRCD and IONA lose a lot after a lousy earning call. There are some signs for this. They both start to rise 3~4 days before the earnings call, however, 1~2 days before the earnings, they start to drop around 3~5%. After the lousy earnings, they drop more than 15%. The stock with continuous rising trend before earning announcement is promising. For example, CLHB kept rising before the earnings and soar more than 20% after the rosy earnings call.

Good luck!