I feel compelled to chime in here aside from not getting pre-approval from my nemesis anx. The mixed comments about this WAMU short discussion from dave makes me curious as to exactly what you do dave. If you are truly an experienced trader you would know that when the majority of the wall street analysts are on one side of something, that is a very nice opportunity to do the opposite. This is why people analyze sentiment indicators, to fade them. This is a component of my trading system for entries. Kevin Haggerty, Larry Williams, Paul Tudor Jones ( the one of these three that I do not know personally ) to name a few thrive on doing exactly that. With all of your experience you have to know this. Those who support analysts are normally shills for the brokerage firms.
We also know that the majority of mutual funds do not beat the S&P 500, and this has been the case for years on end. So to claim that the analysts are not recommending something is absolutely no reason at all to do or not to do it. History shows quite clearly most of them were bullish on internet stocks in 2000, and some have actually gone to jail due to conflicts of interest.
There is no reason to study a stock for months upon end before taking a position, that is absolutely the last thing I would ever do. That opens the door to far too many subjective evaluations of different pieces of information. Maybe you are capable of doing it, but the average person cannot get caught up in “the story.” There is far too much BS in it, and why many execs get themselves into trouble. Further, there are very intelligent people in this blog, and there is no reason that they have to hand there money over to a professional just for the sake of doing it. I talked personally with a few at our get together and their knowledge of trading stocks was impressive.
Keeping things simple is what the majority of great traders that I know would tell the average person to do in making their decisions. If most analysts were capable of being traders they would be, the pay is much higher. Many of them would not even know how to place an order to buy or to short. You have to know this so that leads me to the question of what exactly is the point of your input here?
I do agree that shorting this stock right here is not something I would do. However, there is a solid downtrend in place, and the last 12 months earnings are declining so shorting a pullback in this stock of a 10 day high or so would be a reasonable short term trade to make. I would not chase it right here due to it being pretty far extended downward already.
