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No. of Recommendations: 11
With CNXS starting to climb the hill a little bit again, I thought it
would be prudent to look back at the recent decline and see if there are
any perspectives to be taken from it.

Firstly, here's a badly formatted table (sorry, I'm format ignorant) of
the recent activity, lifted from Yahoo's Historical Prices link:

Date Open Hi Lo Close Vol Adj Cl.
=================================================
17-Feb-04 13.73 13.80 13.00 13.16 189,200 13.16
13-Feb-04 12.85 12.95 12.76 12.82 83,800 12.82
12-Feb-04 12.60 12.94 12.50 12.75 74,500 12.75
11-Feb-04 12.55 12.80 12.43 12.47 138,300 12.47
10-Feb-04 12.46 12.54 12.30 12.47 89,300 12.47
9-Feb-04 11.80 12.30 11.62 12.30 107,000 12.30
6-Feb-04 11.47 12.36 11.20 11.79 75,900 11.79
5-Feb-04 11.26 11.50 11.25 11.26 75,600 11.26
4-Feb-04 11.21 11.50 11.20 11.29 85,700 11.29
3-Feb-04 12.30 12.30 11.12 11.43 117,200 11.43
2-Feb-04 12.31 12.44 11.97 12.13 55,200 12.13
30-Jan-04 12.15 12.45 12.10 12.23 56,000 12.23
29-Jan-04 12.35 12.57 12.17 12.34 100,200 12.34
28-Jan-04 12.60 12.68 12.39 12.50 112,700 12.50
27-Jan-04 12.54 12.70 12.40 12.50 171,200 12.50
26-Jan-04 12.95 12.95 12.50 12.54 195,200 12.54
23-Jan-04 13.75 13.76 11.76 12.70 199,700 12.70
22-Jan-04 14.22 14.48 13.75 13.82 44,200 13.82

The huge volume spike in late January obviously shows that a fund (or
huge indiv. investor) found something more interesting to invest in,
and wanted to free up some funds ... and quickly! This, in turn,
created several days of opportunity in early Feb (limited funds for
investing prevented me from adding to my stake ... my personal lesson).
Now, someone is starting to buy it up again, driving it past 13, and
even close to 14 at one point.

So, who cares about the market in a one-month span? Aren't we supposed
to ignore the short term, and focus on the long run?

I think for smaller stocks, the short term can be chock full of lessons
as far as buying opportunities, since a major movement from one or a
few investors can move the price quite a bit. One can never tell which
investors with huge positions can suddenly decide:

1.) They've got a better stock idea over 3-5 years than CNXS, so
they want to move quickly.

2.) The quarterly report didn't float their boat (an overreaction to
the seasonality of Japan?)

3.) Those Fiber Choice tablets are nasty ... this product will fail!

4.) Gotta put the down payment on the new mansion, and CNXS was their
tenth best stock idea.


The lesson is ... who knows? And, if you believe the stock has not
changed fundamentally, then you can also say ... who cares? ... and
take some of your free cash and buy more.

The trick is having a good feel for the company, the business, it's
trends (Japan seasonality, etc), and it's management (as much as an II
can). If you don't have a good feel, just remember the original
recommendation and follow-up reports from Hidden Gems to back you up,
not to mention your fellow HG posters who own CNXS. If you don't want
to monitor the short-term fluctuations, just set up a stock price alert
to let you know when someone is bailing at a high rate.

Okay ... I'm outta breath ... recovering ... okay, I'm good.

With some of the concern a few weeks ago about the stock tanking, I
thought it would be good for us to try to discuss this so that we can
learn and maybe not get to concerned the next time one of our stocks
drops 20%-30% with no rhyme or reason.

Best regards,

Tom


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