Quote from short&naked:
Just because some doom and gloom is already priced in doesn't mean there isn't more to come.
I love this beginner logic, "it's gone down 73% already, can't go down much further!"
hehe me too!
Think about it...You got two guys...one guy puts all his money in a stock when its at 100. Stock drops 73% and the price is 27 per share now. New guy says "Hey! its down 73%! Cant go much lower" so he puts all HIS money into that stock at the 27 dollar per share price and then the share price goes down to 1 dollar lets say.
The guy that bought at 100, lost 99% of his money
The guy that bought at 27, lost 96.3% of his money
If both guys started with 100k there is only a 2700 difference between their accounts now.
This is actually kind of funny, because I remember someone on this board that said something like "FNM cant go down any further...its already in the 20s!" Or those guys on the peter schiff video last year that said GS was a buy at 175 and it was a bargin! Look at GS now 54 dollars per share and its STILL trading at a premium i say! GS, based on last quarters results, is a FAIR price right at 51. Thats not looking forward, that is the FAIR value RIGHT now, with its earnings where it is, yet its still above 51. If you are looking forward, I would say the price should be much lower. They aint comming back next quarter. Their earnings are going in the toilet and no telling how bad its going to be next quarter. I know what you are saying...they have 40 billion in assets and their market cap right now is 20billion. If they liquidate...you double your money! WRONG! If their short & long term assets dropped in value just 5%...just 5%, thats it...no assets left. If it drops 2.5%? Then they are at exactly where their stock price is. You think if they tried to liquidated all their assets right now, the would get 100 cents on the dollar? They would get less than 80 cents on the dollar. GS is going down bad.
Ok...now i've rambled on too much. I always seem to do that...start on a topic and then 5 minutes later, im talking about something else...
