Tuesday, February 5, 2008

Do Not Marry Your Stock, Control your Losses, Lessons from SIRF, GPS Chip Maker

Today, GPS Chip Maker SIRF Technologies (SIRF) dropped over 50% in value. They reported bad earnings, and bad guidance. SIRF says there is demand for GPS chips, but pricing has gone down over the last year, putting strain on SIRF.

There is weakness in the Personal Navigation Device Market, but in the future, GPS chips in the wireless handsets are going to be a big growth area.

Despite this long term bullishness, investors should still be careful about individual cases in the GPS area, and investors still have to control their losses. SIRF and Garmin (GRMN), another company in the Global Positioning arena, have been going down big percentages in the weeks prior, and if an investor had the discipline to sell, that investor would have saved themselves from much larger losses.

Even with long term bullish trends, you still have to control losses in individual stock positions!

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