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  1. john is offline
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    Joined: May 2008 Posts: 2,836
    08-08-2008, 10:59 AM #1

    Switching out the old for the new

    I have made mention of this before when SIRI first went below the 2 dollar mark for more then 5 days that the old SIRI investors on margin (weak money) was now switched for the newer (strong money) investor. This happened because of margin calls and not being able to buy SIRI on margin while it was under 2 dollars. The new investor, I feel will be there for far longer then the old ones that got in for the merger POP. First reason is they are not buying on margin which means they are not worried about the high interest rate they are paying for margin interest. Second they are freash and not beaten by the merger fatigue. They are also more willing to wait because they know there will be no big bounce but see the potential for a nice slow and long rise in the stock price. This just happen again with the XMSR transfer to SIRI shares. I have started to notice something new on the boards. First I saw more of the pissed off investor blaming Tyler, Mel, and anyone else. That is now switching to people saying they are new here and just bought in to SIRIXM, and are excited to be in what they think is a nice growth opportunity. I as a true long am glad to see the switch. If there was ever something that pissed me off was that these people that were just here to make a quick buck off the merger, were mad that they could not sell after a few dollar rise in the stock, leaving us true longs holding the bag. Well I say out with the old and in with the new, nice to see you new guys.

  2. zcurzan is offline
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    Joined: Jun 2008 Posts: 404
    08-08-2008, 12:00 PM #2
    I agree, I think its a perfect storm of events. A lot of people piled in to make huge bucks on a merger, margined out their accounts and either slowly bailed over the 17 month wait, or fled like rats from a sinking ship as they got their margin calls on the way down.

    That combined with a new company, with stronger future potential, and a share price basement (of sorts) sets the stage for patient investors with a penchant for speculation to step in, put their money on the table, and stop neutorically checking the share price to play the swings. Hello, share price stabilization, nice to meet you.

    It will be nice to toss some ideas around about the future prospects of the company instead of discussing "So uh how high does this go when we get merger approval? $8.00?"

    And here's to all of you with the patience to have been in this for years.

  3. doobz26 is offline
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    Joined: Mar 2008 Location: Michigan Posts: 104
    08-08-2008, 12:52 PM #3
    I'm sure you "true longs" had your sell orders set at or above 4.00 to cash in on merger approval.

  4. john is offline
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    Joined: May 2008 Posts: 2,836
    08-08-2008, 02:28 PM #4
    doobz26, Actually it was at about 5 just like before there is a certain point that the stock just is not worth the price, that it is that is hype is what is driving it up past reallity. There is a difference between being reasonable and not. I can say though most that got out at that price plus would be buying back as so as it got back down to the levels we thought it should be at. I did the last time it went to 9. I was also greedy enough to keep 10,000 shares because my last sell was at 8. Thats what being unreasonable and greedy gets you.

  5. zcurzan is offline
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    Joined: Jun 2008 Posts: 404
    08-08-2008, 04:58 PM #5
    Quote Originally Posted by doobz26 View Post
    I'm sure you "true longs" had your sell orders set at or above 4.00 to cash in on merger approval.
    I'm sure people had a portion of their holdings that they were going to play in the short term. That's just common sense. I myself had a sell order for some shares because I needed some cash and it would be an opportune time to sell out.

    And I agree with john, when something gets massively overbought, cashing out is the smart thing to do. The difference is if you are long, you aren't in hoping for a short term swing, you just know how to handle one when it comes. No expectation, no margin account, no disappointment, no margin call.

    Sorry I take that back, I was expecting a positive reaction, and I was disappointed. But it didn't bankrupt me, it just pushed my outlook further down the road.

    Ultimately an investment is an investment, whether short term or long term. By design you are looking for a return on the money you put into it. If you invest now, and cash out in 2012 at $5 per share, current holders are going to accuse you of not being a long because you are selling and walking away. It's all relative. Just some investments (attempting to time the market and play a merger) are riskier, near sighted, and probably fail on a whole more so than buy and hold as a "long".

  6. Newman is offline
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    Joined: Jun 2007 Location: Dallas Texas Posts: 1,162
    08-08-2008, 11:38 PM #6
    zcurzan, I think our trading strategy is very similar.

    I have held a moderate position in SIRI for the past 4 years. That is not going anywhere, as I feel that SIRI is a great growth company and will be highly profitable in the next 3-5 years. Once they become profitable, they will pay off their debt and start buying back shares. Once they get to this point (like I said, 3-5 years, if they last that long as a stand-alone company which I doubt for some reason) they PPS will skyrocket.

    I had also made some merger arb plays over the past couple of months, purchasing XMSR. This is what I term my "trading shares" and had set limit sell orders on those hoping for a pop and a quick profit. Didnt make it, obviously.

    The thing is, I did not and never will base my entire trading strategy on the hopes of a quick pop and sell in a speculative company that I have no hope in for the future. This is exactly what many people have done, and it failed for them horribly. Now, they either sell for a loss, or hang on to a stock that they do not believe in. In my case, I simply allowed them to convert, and now have that many more shares that will sit in my long pile for the next 3-5 years. Am I disappointed? Yes. I could have used some quick profit. Who couldn't? But it does not change my investment strategy in the least. THAT is what is important.