Chasing Value: What's wrong with Intuitive Surgical?

So much personal information for an investor who's been following this stock for some time. The PE information is a common sense one and not a determinant to invest. I would have appreciated some more company projections, economic fitting, and international growth type of opinions. Lacking this information, I neither would listen to Cramer nor to you on investing a penny in this company.

Ali,

Thanks for taking the time to point out this posts deficiencies. This post is part of a continuing dialog over the past three years. I hope you continue to follow the investing journey. I tend to write in a conversational style. I am not on Wall Street nor am I a journalist. You can find the facts you seek from any financial site.

Ali, if you ever get the chance to sit down and talk to a successful investor, one who has been in the game for more than just a few years I suggest you jump at the chance. The great thing about Sheldon and some of the other bloggers on Blogging Stocks or say some of the folks on "Fraud Money" is that they let you into their minds, i.e., the psyche of the investor which as you are well aware drives the market on many occasions. I once wrote that I can put numbers into any forward looking equation and create a reality albeit a false reality. (Tech stocks 98-2000 ring any bells?) Why are some successful at this endeavor while others are doomed to fail? Intelligence? No, I believe the two biggest components of stock market success are experience/historical knowledge, and discipline/rationality. The ability to manage risk on the fly helps also but I'll lump that one in with discipline. Of the two if you don't have discipline you'll go down the tubes quickly. Recently, I took a call from a young friend, 20something, I'm 48 who calls on occasion to bounce ideas off of me. He told me he was trading GM. I told him to get out immediately. I told him that he might make some money but if he kept taking risks of this type he would eventually lose his shirt. He called me again one afternoon not so long ago and asked me why GM no longer was trading and was displaying a price but no volume? Essentially, the party was over and he crapped out. There are plenty of numbers in this post. Obviously, Sheldon relies on p/e (in this instance) and didn't go into how much they make on each machine and how much they might make if each hospital if forced to buy/upgrade more machines (saturation rate) and how many da Vinci's are sold internationally. Also, they make money off of the servicing of the devices. With international sales you have to start looking at exchange rates. It get complicated real quick. Or, you can rely on technical indicators. Is the stock going up on higher volume and is it becoming more profitable? Very Investor's Business Daily. Yet, go back a year later and see which stocks IBD put in one of their lists and see how successful they were and very quickly you'll see the limits of technical analysis. For every Green Mountain Coffee you'll have some unknown company which fell off of the charts never to be heard from again for some very human non-technical reason.

And as far as listening to Sheldon well, I questioned his sanity on this stock about 100 points ago. Not really his sanity but for my investing style, there are just too many unknowns and the moves are dramatic. I tend to stay away from stocks like ISRG, FSLR, GOOG, anything that may bounce 20 points quickly except of course when I might short ISRG tomorrow at the open say, 100 shares, for lunch money. Hey, daddy needs to pay for his frappacinos. Also, that Todd Harrison character at Minyanville seems to have his crap wired too.

Other than the Ben Graham bible, you might want to check-out A Mathematician Plays the Stock Market/John Allan Paulos, Hedgehogging/Barton Biggs/ A Demon of our Own Design/Richard Bookstaber, Wealth, War, & Wisdom/Barton Biggs. Also, there's a great series on PBS "The Ascent of Money" Niall Ferguson.