DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - Sony profits down 94% as they lose $430 Million in last quarter

**Rasklad** · 10-28-2006, 06:46 AM

Why should their stock necessarily go down? Because of a one time charge? Patient and prudent investors realize that this sort of event, namely the battery issue, is not part of normal operations for Sony and they look at the numbers exclusive of the charge. All businesses face challenges like this one from time to time and it doesn't makes them stronger, not weaker.

For example, I own an insurance company that I think has a very bright future but last year's hurricane season slaughtered this company's profits. For several quarters the company experienced significant losses as it paid claims and the stock market pummelled it. I was confident in the company's strength, though, and the fact that these hurricanes would tighten rates so I bought more. Now it's back to the price at which I originally bought it, except that my entry point is lower and the company's whole future is still ahead of it. And it continued to pay its dividends the whole time.

Sony's news is bad news, sure, but it's a one-time thing and selling a company you think is strong on the basis of a one-time charge would make you a foolish investor. There are a lot of foolish investors out there but it makes sense that the price shouldn't necessarily fall on this one piece of news.

10-28-2006, 06:46 AM	#7
Rasklad Join Date Oct 2005 Posts 390 Senior Member	Why should their stock necessarily go down? Because of a one time charge? Patient and prudent investors realize that this sort of event, namely the battery issue, is not part of normal operations for Sony and they look at the numbers exclusive of the charge. All businesses face challenges like this one from time to time and it doesn't makes them stronger, not weaker. For example, I own an insurance company that I think has a very bright future but last year's hurricane season slaughtered this company's profits. For several quarters the company experienced significant losses as it paid claims and the stock market pummelled it. I was confident in the company's strength, though, and the fact that these hurricanes would tighten rates so I bought more. Now it's back to the price at which I originally bought it, except that my entry point is lower and the company's whole future is still ahead of it. And it continued to pay its dividends the whole time. Sony's news is bad news, sure, but it's a one-time thing and selling a company you think is strong on the basis of a one-time charge would make you a foolish investor. There are a lot of foolish investors out there but it makes sense that the price shouldn't necessarily fall on this one piece of news.
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