[Broken Arrow]

C'mon Broken Arrow, lighten up!

Why you bustin' chaps?

Tripod, I promise I'm not trying to bust anyone's... chaps. What I am saying isn't meant to be personal. I've always been against chasing after hot stocks, regardless of who brings it up.

In fact, I always try my best to be as objective and factual as possible.... Now, whether I succeed or not is a different matter.

But right now, Visa is the Latest Hot Stock, and whenever you have this much hype surrounding the stock, and with such a meteoric climb, chances are very good that the hype and speculation is cooked into the price.

Now here's the thing. I don't doubt that Visa is a bad company. Just like Google and Apple, I'm sure the fundamentals are solid. However, the fundamentals also has a hype-inflated bubble cooked on top, and the trouble with bubbles is that they're not built from sustainable business fundamentals. They can pop at any time, when you least expect it. That's the risk. That's what happened to Google (even though they're still a good company), that's what happened to Apple (even though they're still a good company), and believe me, that's what will happen to Visa eventually as well (even though they're still a good company).

Now, frankly, I'm not above speculating on short-term bubbles. But I'd definitely do so with a trailing stop in place. Or just sell outright. Sometimes, it's better to just go ahead and lock in the gains. Buying is great, but selling-- especially when you know it's About That Time-- is even better. That's all I am trying to say.

BA - I think trading stocks is fine as long as it is done as a small part of an overall investment plan. Taking 5-10% of your money for dabbling in stocks isn't such a bad idea.

Steve, I agree with you, because that's the same advice I give as well. But as I have mentioned in the above paragraphs, if the exercise is to actively trade stocks (as opposed to passive investing), then we need to know not just when to buy, but also when to sell.

If something is considered speculatively hot, it's made an abnormal return by bucking the trend against the rest of the industry, much less the sector, much less the market... AND, if we can't articulate the forward fundamentals as to why it can sustain that level, then the only logical conclusion to me is to SELL.

Again, I don't disagree with the advice to set proper allocation for speculating. But even in speculating, there is a good way and a bad way of going about it... and I just don't think chasing after hot stocks is a good way to go.

Yes, I realize there are great risks trading stock.

Hey man. Sorry if it seemed like I gave you a hard time. I assure you that wasn't my intention. I'm really glad Visa's done well for you guys. I had considered buying it, but couldn't articulate the fundamentals myself so... I didn't. Anyways, let's virtually shake hands on it? We're all Cool & the Gang here.