INVESTMENT SUICIDE PRACTICED DAILY THROUGH TWITTER
I've mentioned three different companies as potential investment (longer than 6 months) opportunities in 2012: GSIG, PTGI and PRGS. I'm not going to be that guy who just throws a dozen companies a week out as potential trades or investments just to get readers. It will just serve as a means of giving the perception of substance without any substantive results. There are hundreds of trading sites out there that will give you ideas and setups...this isn't one of them.
I'll go over the technical picture for some individual names this weekend. PRGS has developed into a monster since I profiled it on January 16th when it was trading in the $18 range. It closed today near $22, far exceeding any expectations I had for the company in the near-term. If you were fortunate enough to buy in the $18 range, I would consider taking a portion off and keeping the rest for the longer-term price target of $29.
GSIG is shaping up phenomenally well in terms of price action and technicals. There is some very real accumulation taking place here. I would like to see it break through the $12 range in order to give the all clear to challenge multi-year highs at $14.
On another subject all together. I have been relatively inactive on Twitter logging on only a couple times a day, spending no more than 5 or 10 minutes on there at a time. The Twitter atmosphere simply doesn't match my current investment mindset. It very much did during the second half of 2012 and you couldn't tear me away from it, as it's an extraordinary venue for gaining information. Probably the most extraordinary I have ever witnessed.
There is a problem, however, with an abundance of information when your investment methodology relies on patience. Information has the potential to disrupt your discipline. When logged into Twitter or any other venue for outsized information transfer, there will be tiny seeds of information planted into your mind on a real-time basis. Some of those seeds will reinforce your opinions about market direction or an individual company. Some of those seeds will challenge your opinions about market direction or an individual company.
The more of these seeds that are planted, the more propensity an investor will have to rethink his or her thesis. Twitter is built on a venue that thrives off of short bursts of information. Short bursts of information in rapid succession throughout the trading will only naturally promote activity. It is inevitable that if you are exposed to enough short bursts you will have the urge to act, regardless of whether it conflicts with your long-term investment thesis. In one way or another, you will interrupt progress either through hedging prematurely, moving to cash or getting excessively long/short without the proper setup.
When I am attempting to put together a portfolio of names, I find these short bursts harmful to my long-term success. We live in an information driven world. How much of that information is enough before our minds are simply turn into a conflicted, scrambled platter of great ideas mixed with an abundance of garbage that drown out any real potential?
