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Thread: Advice for a new SIRI investor?

  1. #1
    Siriusly is offline
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    Advice for a new SIRI investor?

    Hi everyone! First post.

    So I've been watching this stock for 6 months waiting for the stock to level out or start an incline but it just doesn't seem to want to do so (yet). That's fine for an investor like me sitting on the sidelines because it just means I'll get a better deal. Now that the stock is well below $1.00 with not much more room to decline further, I'm preparing to pull the trigger and buy heavy and hold because I believe in these guys and their long term prospects for future growth.

    Since I'm just a part-time investor, I was wondering if anyone can help me a couple things I don't understand:

    1. Why did the longs hang in there for so long and lose almost everything?
      For instance, I read someone has 115,00 SIRI shares with a $2.86 average. If the stock has continued to dip, why do people like that hold on? Why wouldn't they sell at $2.00, cap their losses and buy again after the stock price gets back to $2.00?

    2. What is the impact of investing before versus after the reverse split (which seems inevitable)?
      If I invest and the RS occurs to prevent delisting or facilitate Liberty's 12.5 deal, what would the impact be to me rather than waiting until after the reverse split occurs?


    Anyway, hope to get to know you guys and full disclosure here, I was one of those who doubled their money when the Liberty deal was announced. Now I'm interested in a more long-term strategy.

    Thanks!
    Last edited by Siriusly; 02-19-2009 at 09:33 PM.

  2. #2
    doobz26 is offline
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    Sell. Stay away.

  3. #3
    Lithium24 is offline
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    Agreed. Stay away. I wish I had.

  4. #4
    Siriusowner is offline
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    There are several stages investors go thru when a stock is tanking.

    1st - When the stock starts tanking, they are optimistic and think that it will not breach their avg. price.
    2nd - Then when it breaches it, they think the stock is just becoming inexpensive and buy more.
    3rd.- Then when it continues tanking, they think that it will rebound and buy more.
    4th. -As it continues tanking, they still have faith in the company and buy more shares.
    5th.- Then they reach a point where they just can't sell anymore, their losses are so big that they just can't take the losses anymore and start averaging down.
    6th.- Then they reach a point of dispair, a point where it does not really matter to them anymore but they still can not take the losses. They continue averaging down.
    7th.- The stock continues tanking or reach a point where is going no wehere (like SIRI). They sit on the stock waiting, waiting, waiting...and perhaps averaging down.
    8th.- Then, reality sinks in and some of them start selling at a huge loss. Some, stupidily, like me, come back in. Some keep holding.
    9th.- Finally there's capitulation where the stock sinks so fast (and the company finally declares BK) that by the time they sell (if they have time), they lost all their investment.
    10th.- The end.

    I am not going to tell you to stay away, the stock is cheap but you will get what you pay for (what is the difference between cheap and inexpensive ?). Read the fundamentals and study them. Someone may tell you that SIRI is not trading on fundamentals but the reality is that the pps is where it is because of those fundamentals, whether people like it or not.

    Just because the industry is sexy, you might be a user and like the service or the company name is nice, does not make it a good investment.

    Even if you say "But I can buy thousands of shares !"... true, but you could still lose your money the same way as if you were investing somewhere where the pps is say, $30.00 (how many shares of SIRI can you buy with $30.00 ?).

    Again, study the fundamentals, they will tell you a lot. Then make your own decision (or consult an advisor... still if you consult an advisor, do your homework, do not trust him blindly, se what happened to all those people that invested with Madoff ?) and ESPECIALLY, do not base your investment decision on what people tells you in these forums.

    WARNING: Stay away from sharks that promise high returns, they are wolves on a sheep outfit...again see the Madoff case.

    ps: If you are here just to trade, then do so, buy in the low teens and sell in the high teens. Never trade less than 10000 shares at a time, the fees will eat you alive if you trade less. Be prepared to take a loss.
    Last edited by Siriusowner; 02-20-2009 at 12:07 PM.

  5. #5
    doobz26 is offline
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    I'm at step 7. I was averaging down in the $2s and $1s... then pretty much gave up for a long time. I almost accepted the fact then that my money was gone. When you are down 95% who really cares if you lose the last 5%. And I don't think people realize how close we came to BK. I did buy more now today. It's pretty easy now to cut my cost average in half. Could turn out to be another stupid move... but god dangit I need to get SOME of my money back. I'm currently deciding on some type of trading strategy to recover some losses... and then i'm looking for an out. Bottom line. Sirius is a purely speculative play. THE FUNDAMENTALS SUCK. Don't let anybody tell you they don't. If they disagree with that statement then they don't know much about balance sheets or income statements or cash flow or capital structures. (I'm no expert, I took a chance on this stock and got burned).

  6. #6
    m4svt is offline
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    Dude if you get into the stock, you get into it at dirt cheap -a price that it's never traded at before (starting in 1994!). No risk, no reward. I know a few people that have bought stocks for 5 and 7 cents only to see them go to 5 bucks+ (years ago), so it can happen. Just make sure that you have other stocks in your portfolio, that are safe with dividends.

    1. People who average down like myself that don't sell are stubborn investors who think they're getting it a great price. I have made money before averaging down, and I've made money on a stock before that was close to bankruptcy. Since history repeats itself, I'm trying my luck here again.

    2. All I can tell you that if they do the reverse split, might be a good thing if we get it over $5 so institutions may buy. We wont be trading on pink sheets. On the other hand, shorts may have a field day with this thing all over again. And usually, after stocks do a reverse split they tend to fall. Personally I like having the amount of shares I have, and am against the split.

  7. #7
    Sworntwofun is offline
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    Siriusowner... You really hit it on the head...That was me to the T
    Im one of those who now has a decent adv. like .31... but im down quite a bit...from $2.37 from where I started and down still 50% of my original investment capitol.. Now if I could I would like to try playing with between 10,000 and 25,000 shares to sell and buy back because most of those Im in around .12 but it seems Im afraid to make the move...but meanwhile Ive watched at least 2 or 3 opportunities that it would of worked out ok!

    Now monday is gonna be here again with another opportunity to make a move
    but this time I want to try...what is your best educated guess on what might happen? Thanks....
    Anybody else's opions are also always welcome! Tony

  8. #8
    trippingthespeculatingpos is offline
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    there is a big diff between getting into this stock at over a .50 cent avg and getting into it at its current price. The markets have been really bad this week, i sold everything off about 3-4 weeks ago and now all i have is siri, which actually kept me safe through all this bs, i do not think there is any downside, and when this thing climb's out of the teens people are going to be pissed they didn't buy at these level's. that being said i think there was some huge buying opportunities this week and will probaly still be around monday, things are just way too over sold, you can look almost anywhere and find something that is a buy at its current price. I thought about selling a little siri off to get bac but i didn't then it shot up, man if i had got it at its 52 week low which is where it was when i wanted to buy i would've already made some profit.
    Last edited by trippingthespeculatingpos; 02-21-2009 at 05:53 PM.

  9. #9
    Siriusowner is offline
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    I'd like to add that this is a lottery ticket. The problem is, that lotto ticket may never payoff.

    Now, as I said, if you are here to trade, this stock has been great, buy in the low teens (.10 or.11) and sell in the high teens (.19).

    If you are looking to make a serious investment, ask yourself, what do I want: Growth or Income ? If you are looking for quick growth, this is NOT the investment. If you are looking for income, SIRI does not pay dividends, but the bonds are high yield.

    If you are looking for long term Growth, say in 5 years, then go ahead, the stock is cheap (again, think and ask yourself 2 questions: what does cheap imply ? and why is it so damn cheap ?) BUT be prepared to lose all your investment, who knows if these deals they are making up there are going to payoff some day (lotto ticket).

    Besides, if you are looking for inexpensive growth and income: GE, PBT & CHK.

    Pure growth ? Fannie, Freddie, AIG. Those are GSE's and will not go BK. Wait until all the bad news are priced in and buy them.
    Last edited by Siriusowner; 02-21-2009 at 08:57 PM.

  10. #10
    trippingthespeculatingpos is offline
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    a lottery ticket is a lottery ticket, this is a security. Its priced at .13 because the economy is shitty and everything has been brought down, at .13 cents sirius is a good investment, and time will prove this to be true.

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