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What's next for PALM? A few "PRE"monitions.....

Recs

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June 06, 2009 – Comments (9) | RELATED TICKERS: PALM.DL2

    What I'm Learning from PALM.   Reading my PALMs.....

  I'm learning a lot the last year or so.  Last fall I watched some good companies tank down further than the companies I had labeled as "BAD" companies.     It happened again in March.  I'm learning that looking at fundamentals, balance sheets, P/E, and other statistics doesn't always work in forecasting stock price movement.  Mr. Market is not rational, he doesn't have to be, and he's calling the shots.  Even when he's wrong he's right.

  About once a week I look at some of my most point losing calls here on caps. I focus on the down thumbs and look at the trends wondering which might come back into positive points.  IF I see one that I'm unlikely to get back in months, if ever, then I close them for the loss and make space for other calls.  I rarely close an upthumb call if the company still has a pulse.

 I know some CAPs vets would rarely, for any reason, close a losing pick. Accuracy points are the deciding factor at the top of the heap, but I just can't see wasting space on my list.  When I first started closing picks, I did close some too soon. The market swings caught me off guard and I didn't realize the value of the accuracy points.  Overall room on my pick list for better calls should help me in the long run.

  One company I wrestle with each week is Palm.  I'm in better shape than some, point wise on Palm. I still think it was over valued when I picked it, but Mr. Market has kicked it up 3X my start price.  I watched it creep above -300 points on my sheet last week.  Each week I consider closing it, but darn it, I know its a dog!

  I have to ask myself if I'm being vindictive, have developed a hate relationship because it bruised me.  I believe "we" do tend to do that at times. I've seen some very stubborn investors who won't let go.  IN this case I had no money on it, just pride, and each look at it's fundamentals tell me it's history, so I keep it open.  Negative Net tangibles, Negative net book, no earnings, high debvt, a one trick pony.

 Well, the PRE finally launched this weekend.  Not much hype that  I could find from PALM or Sprint.  Both don't have much advertising money, but both have a lot riding on the PRE.  The Yahoo message board is lit up with whether it will be a success or not.  Six people in line at a store opening, ten here, no one there....sold out!

 Based on my analysis, the stock price started back down Friday after hitting a new 52 week high. I "think" that some investors were riding this for the announcement pop and are getting out. I believe this will heighten on Monday and Tuesday.  The speculators will drift out, what will that leave?  I expect to see sub-$11 by Friday, but then the longs hold and the ones who thought they "missed" get in.

 The company is picking up returnable cans from the side of the road to stay in business. The debt load alone requires PALM to sell at least 1/3rd as many PRE's as APPLE sold it's iPhone just to pay the interest on the debt load. Palm hired away a slew of engineers from competitors to get the PRE features out, more overhead.  Finally Apple is already talking hype about it's release and RIMM will probably start hyping theirs next as well.

 The cell phone business is saturated, even if the economy was better.  I don't see Palm getting the volume they need.  Rumor has it that Microsoft wants in the business. I'm not sure if Palm's debt load is worth the entry price.

 I'm still calling this one DOWN.  I have some PUTS, so real money invested now, so I hope this isn't just a hate relationship I've developed. 

 Mr. Market is NEVER wrong, but it's time for Mr. Market to take a vacation or find the next big thing to hype.  I doubt I will get my PALM pick back into the green, but by golly, I'm betting I can get a few of my points back so that when I do close it, it's only a moderate eye sore on my "WORST" pick list and will ever be my reminder that Mr. Market is in charge.  Fundamentals, TA, gut calls, etc, don't mean a thing if Mr. Market's got that name.

Good luck,  gotta go, is that my daughter's phone ringing again?  How did she get her address book and favorites onto that PRE already.......??  :)

 TSIF 

 

 

9 Comments – Post Your Own

#1) On June 06, 2009 at 8:11 PM, ChrisGraley (30.03) wrote:

http://caps.fool.com/Ticker/PALM/Commentary/Page1.aspx

My pitch for PALM said pretty much the same thing.

I don't think they have a hope.

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#2) On June 06, 2009 at 8:29 PM, TSIF (99.96) wrote:

Good pitch Chris, I gave it a rec. Most of us who down thumbed it months ago are scrolled way down the board. Popular pick here on caps, comes with it's fans and detractors pretty well entrenched.

You had a few points I didn't cover. Sprint's network was on my list, but they all have their following there as well. Thanks!

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#3) On June 06, 2009 at 8:45 PM, ChrisGraley (30.03) wrote:

Yeah, I personally like what they are trying to do with their network as well. I do think that Sprint has a tough road though since their customers left due to poor customer service. Usually when someone is upset enough to leave, they never want to come back. If any of those people are potential Pre customers they'll just wait 6 months.

Personally I may switch to Spint when my next contract is up. I like their network and I'm sure that their customer service people are bending over backwards now that their jobs are on the line.

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#4) On June 07, 2009 at 1:05 AM, JakilaTheHun (99.94) wrote:

But at least you are not -514 points on PALM.  The terrible thing for me is that since I initiated @ $2.08, I get screwed really terribly on slight increases in value.  Whereas, someone who red thumbed @ $7, wouldn't get hit nearly as hard. 

Obviously, I made a mistake red thumbing at $2.08.  One of my strategies is to take advantage of bankruptcy risks while investing by prudent diversification.  The inverse rule of that is to never jump on a short when the company is priced for bankruptcy already.  PALM was priced for BK when I red thumbed. 

But I think at anything over $7, it's overvalued.  And even that might be generous.  So I continue riding it out --- even though it might be to my own detriment.

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#5) On June 07, 2009 at 9:03 AM, TSIF (99.96) wrote:

Yes, I noticed there were CAP's players much worse off than me, but that doesn't make me feel any better. That means that they got "FOOLed" and then I jumped in anyway.  There is a lesson there as well!

That's a great point about something already being priced in.  I jumped a few others that I thought were going to be close to going BK that we apparently at bottom that have beaten on me as well. Mr. Market speculates a lot more than "he" realizes.

I keep telling myself that if Palm hits a certain point I'll kill it and run, but it keeps crossing that point and I just can't do it.  I think $7 with the pre would be "fairer" as well.   I think Mr. Market will let it back down to $10. IF it starts back up again then I'm gone. If it lingers there and we get a few "realistic" quarters then it will break one way or the other!  :)

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#6) On June 08, 2009 at 10:24 AM, TSIF (99.96) wrote:

So far, so good....(if you're short).....

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#7) On June 11, 2009 at 3:48 PM, Tagit (46.70) wrote:

You gave me a tip for sub 10 stock, now I'll give you one. SYMW...research it. .006 --a penny from heaven.

Rumor has it they’ve recently purchased a great deal of land for pennies and when added to company assets will reflect true value. Balls in your court.

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#8) On June 11, 2009 at 4:22 PM, TSIF (99.96) wrote:

That looks like a fun one!  They are great at PR, but but government funding is a win.  I like their old name better.....dinosaurus.  I don't know if my broker lets me go to that many decimal points.  You're missing one .0006.  I've heard of penny stocks....but micro-penny stocks!

4.82 BILLION SHARES outstanding. If they want to maket things "real" they'd better be working on a major reverse split before trying to raise more funding.

I'll research this one this weekend. It might be a fun stock to own if I can use that many decimal points!

Take a poke at MCZ if you like penny stocks.  A little more lofty in the $0.30 range.

Thanks!

TSIF 

 

 

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#9) On June 11, 2009 at 4:48 PM, Tagit (46.70) wrote:

You're welcome-you'll be happy when .0006 gets to $0.30 Your correct---but but but but (goverment funding) and don't forget (all) that land.  :)

I'll take a peak @ MCZ

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