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Motley Fool Hidden Gems / HGS: CNS

URL:  https://boards.fool.com/every-couple-of-weeks-i-religiously-read-toms-20803599.aspx

Subject:  Re: Why invest in CNXS? Date:  5/22/2004  2:28 PM
Author:  0000ED0000 Number:  380 of 766

Every couple of weeks I religiously read Tom's letter or update. I take note of the stock, visit their website. Then I forget about it.

Then the next time that I've allocated some funds, or take a short-term profit to reinvest, I do not consult the latest newsletter -- I go to the Scorecard. What has been beaten up? Has the story changed? I read the boards (here and in Yahoo), listen to a conference call or two.

Since I overloaded with FARO and TACT, I was able to take some cash off the table recently, and the above process led me to CNXS (just as it previously led me to FARO, TACT, AWIN, FDP, SCSS, CDIC). It seems to be working, my HG performance is *better* than the Scorecard because I'm always in on the dips.

Small caps are volatile. If you buy when a stock is at a performance peak, you are going to see dips. Tom recommends you sneak in with a one-third investment and average down by thirds; is that what you did here?

Because of this timing strategy, I nearly always see posts like yours, from disaffected buyers, just as I am entering the fray. Yet I profit.

Other stocks might move up next week or next month, while CNXS may have to wait for another cold season to snap back. Or maybe not; you have no way of knowing which HG is fated for a pop or a dip. CNXS, having suffered a nasty and not-really-justified thrashing from the market, however, is a less likely candidate for a beating than, say, Middleby, up 208% since the initial recommendation (note: I have done no research on MIDD and that statement is based on the 208% run-up alone).

Sending your money around from stock to stock looking for short term benefits is not going to build wealth for you. If you were initially uncomfortable with the thesis Tom was putting forward, you should not have chosen this stock. But if you bought it based on his reasoned argument, and your own research into the basis of that argument, then you should really ask yourself what, if anything, about that argument has changed and make another reasoned decision based on whatever new data there may be.

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