WHAT IN THE NAME OF TARTARUS HAPPENED TO SYNC?
A band of undesirables seems to have taken a hold of one of my positions and wreaked havoc on the share price. I speak of SYNC and the phenomenon of substantial volatility now becoming the norm for this stock. I spoke about this potential for a modified road map in attaining value last week. Despite the fact that I knew we would see volatility, when it actually takes hold and the reality of giving back substantial profits becomes, well.....a reality, I become unhinged and want to take heads.
Before I get carried away with criticizing all the new patrons of the company I first discovered in late-March, let me put the past couple of weeks in perspective. SYNC was an undiscovered opportunity at the beginning of this month. Volume was no more than a couple hundred thousand shares per day. The message board was vacant, seeing no more than a couple posts per day and sometimes none at all. The Stocktwits stream was populated by myself and a few others who had discovered the name.
Surprisingly enough, there seems to be individuals in the marketplace whose opinions are more valued than even mine. So much so that when they publish a research report on a company the dynamics of trading within that company are changed forever. At the same time, an entire group of anti-heroes becomes involved in the process, refuting the claims of the original publisher of the data, mostly based on concerns over the reputation of the one publishing the research. The classic war between short sellers and longs ensues.
We are currently in the first inning of that war. It makes no difference who the antagonists and protagonists here are. It seems that instead of focusing on the company in question, the issue at hand has become who is driving the stock price? The only tangible difference, when looking back on SYNC a decade from now, the participants in the day to day movement will have is some extra zigs where there should have zags. And perhaps some extra zags where there should have been zigs. In other words, the path of getting to the pot of gold at the end of the chrome-plated rainbow has become much more nefarious in nature. It is not simply going to be straight line. There will volatility galore.
As a result of the publicity that is aimed mostly at investor types who are far less sophisticated than any single person who frequents this forum for efficient exchange of information, SYNC has become filled with undesirables. Those undesirables, amateurs or perpetual loss magnets need to be dealt with before we can move higher. Between the prices of 10 and 12.50 an entire band of misfits became involved with this stock who thought they could simply get on board and easily double their money, leading to vast improvements in their quality of life through improved refrigeration of perishables, 3-D televisions and wheels on their automobiles that continue to spin when the car has come to a complete stop.
I am here to deliver a message to those individuals seeking instant gratification without performing the proper due diligence or fulfilling the minimum 100,000 hours of practice. That message is that you will not be allowed to make a single dime from this stock because you do not have the knowledge and wherewithal to withstand the volatility. You know little about the company and because of that simple fact, you will not be able to stand a further decrease in stock price. Furthermore, you likely have no understanding of how to allocate funds into an opportunity of this caliber. You likely utilize excessive leverage that does not allow you the staying power necessary to withstand what happened just yesterday. Even when you do not utilize leverage, your attention span is so short that once this opportunity looks like it won't produce a double in the span of a week, you will jump on the next company mentioned by a friend of a friend of a friend, only to come up with snake eyes once again.
My advice to you is to grab your leather satchel, put on your flip-flops and Kangol hat, move two steps to the right in order to avoid tripping over the bag of Doritos in front of you and run straight to a bank. Proceed to ask the teller for a one year CD and never come to these parts again.
SYNC is in the process of dealing with undesirables. Unfortunately, there are many undesirables to deal with leading to days like yesterday. The fact that undesirables are present, doesn't change the fact that this is a company with a legitimate product, a top-notch customer base, attractive fundamentals and increasing profit potential. The value creation process will continue and it will be to the upside.
