The purpose of this post is for me to try and remember why I bought shares in this company twice.I know that at one time, I thought CNXS was a good investment with potential for long-term success. The stock price is down since my purchases, but that's not important - I am young and consider myself to be a long-term buy and hold investor (most of the time). As I become a lot more familiar with some of the other Hidden Gems, I feel like the money invested in CNXS could be used in a more effective way (maybe even cash to be used for opportunities that arise). My Hidden Gems are purchased in an IRA, and I am not concerned about diversification - the index fund in my 401(k) takes care of that.The point is this...I need some of you wise Fools to tell me what you think. Do any of you agree with me? If I can't remember why CNXS looked better than others, should I continue to hold for no good reason? Why have you invested in this company, and passed on others?This post is longer than I intended, but I would like to hear your opinions.Thanks in advance,Mark
Hi Mark -The first question I would ask, is how long have you been holding CNXS? A month, two months, six months? Well, if you have had it for six months, it is time to step back and take an evaluation of it.I would look at it from top-to-bottom and determine how you value the company on a 3-5 year horizion. I would do the same with the alternatives at which you are looking. If CNXS looks better than them on this horizion, then I would look at retargeting your investment. If on the other hand, things look about the same, then I would hold it.Finally, you say:My Hidden Gems are purchased in an IRA, and I am not concerned about diversification - the index fund in my 401(k) takes care of that.When investing in Hidden Gems, I would always have diveriication strategy. While Hidden Gems can be market pounding performers, they can also be pounded by the market. I would look at investing in a minimum of 4 Hidden Gems, and not focus your investment on just one.Yours,Jordan
I too have had the same feelings since buying into CNS, which was about 7 months ago. The price drop has not motivated me to sell, and I am not too concerned about it's staying at that level all that much, but I feel that it must have in some way motivated me to ask those larger questions as well.I feel that CNS is not a dynamic growth company, so I am left to ponder on their ability to consistently rise over a long-term.They have instituted a dividend and then raised it 25% in just these past 7 months, so it shows that they do have a desire to reward their shareholders. I don't have nearly enough shares to make the amount in any way relevant. But I wonder if such a small and pretty much anonymous company would be better served putting that dividend money into more advertisement to get their product out there.Reading their financial reports makes it clear that they have no intention of looking to be bought out and, I assume, would resist a buyout till the last point. That works both ways, I can see an up and down to that depending on the point of view.My dad is a notorious snorer and if there had ever been anything to break down the wall of sound that came out his sleeping nose in his heydey, my whole family would have been all over it. So I guess I have a more than financial attraction.I do feel though that until they get their name out there, and their product more known in the general marketplace, they will not make that big leap. Which a bigger company could do--heck, at this point, CNS could have their whole market ripped out from under their noses if some big company wanted to spend the cash to promote their own form of the product, even if it was inferior in quality.All things considered, I will stick with CNS for the time being. Their fundamentals should not change too much, and they are good. But I feel maybe by sometime next year, if they haven't made any solid moves to utilize advertising to get their product out there for real(and what would their financial spreadsheets look like if they had to put money into that--would it be so rosy?) then I will move on.
Mark,I took a shot a valation a while back. Sure, it hasn't sky-rocketed, but I still find this a trememdous bargain. I like that they're re-focusing on their core product and realizing that $$$ is better spent rewarding shareholders than diversifying unnecessarily. Just my .02http://boards.fool.com/Message.asp?mid=20538219Blitzen94(long CNXS)
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.
>>Sending your money around from stock to stock looking for short term benefits is not going to build wealth for you<<Short-term trading, buying stocks and holding for five minutes to five hours, has returned about 400% for me over the past eleven months. I use my own proprietary trading method, watch the markets all day long and am usually 100% cash overnight. I love what I do and although a Buy and Hold investor most of my prior life, I would not, could not, go back to it under any circumstances. Building wealth is a state of mind as much as an investing technique. If you really think you can do it passively holding stocks for the long term, you probably can. I thought I could do it through in and out trading, and I have.
Short-term trading, buying stocks and holding for five minutes to five hours, has returned about 400% for me over the past eleven months. I use my own proprietary trading method, watch the markets all day long and am usually 100% cash overnight. I love what I do and although a Buy and Hold investor most of my prior life, I would not, could not, go back to it under any circumstances. Building wealth is a state of mind as much as an investing technique. If you really think you can do it passively holding stocks for the long term, you probably can. I thought I could do it through in and out trading, and I have.Just wondering, but what is your return after trading charges and taxes or is your 400% figure after all trading costs?
400% includes commissions, but not taxes.
"400% includes commissions, but not taxes."Do you contribute to the account steadily? Is that your IRR?Congrats, keep it up and you won't even need to trade anymore!Ben
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