Monday, December 13, 2004


The following is a copy of an email that was sent to a reader this morning. The reader reported that he purchased SIRI last week.

I reduced my family’s holdings in this stock again this morning. We sold 1,000 shares at $7.91; these were purchased for $2.96. We still own more shares and we own shares in XMSR.

It is my opinion that it is ok to play around with speculative issues if you have a solid base for your serious money. Trying to predict which way SIRI will swing from here is impossible. If VZ or some other big phone company were to announce a deal with ROXI or with SIRI, both stocks could move 50% or more in a flash. Of course if the deal benefits ROXI, it would go up and SIRI would go down and vice versa.

My opinion is that ROXI is more speculative than SIRI which is more speculative than XMSR. In all three cases, investors are betting on a home run that may or may not ever be hit. Who knows, maybe everyone will carry an Apple i-pod in 10 years and wonder why anyone would want a radio. On the other hand, the latest XMSR radio is a neat toy. It is a portable satellite radio that can record up to 8 hours of your favorite songs.

The game being played by all players is called the bigger fool game. Who will be smart enough to sell out at the peak price to the bigger fool? The biggest fools will be the ones left holding the bag.

The growth potential of this company is huge but this company needs huge growth over ten years to be fairly valued.