As many readers no doubt know by now, Hewlett-Packard (HPQ) recently reported a massive write-off on its acquisition of Autonomy. I bring that up as a way to talk about what has happened to a great many of the tech leaders that flew so high in the stock mania that ended in March of 2000.

A lot of the pretend stocks of the dot-com variety have, of course, evaporated, but plenty of "real" companies also have declined in the 12-plus years since the peak of that insanity, HP being just one example. (Its price is now back to where it was in 1995.)

What often happens to good companies that get really expensive is that when valuations start to decline (usually due to some fundamental deterioration), people are attracted to them because of their "value." We have seen a bit of that with Apple (AAPL) and will probably see more prospectively (more about Apple below). In any case, Hewlett-Packard, Dell (DELL), Intel (INTC) and Microsoft (MSFT) are all examples of that, but there are hundreds more. (Microsoft publishes MSN Money.)

How to turn a garage into a woodshed

However, the difference between Hewlett and the others is that its board is probably one of the worst on the planet. After bringing in Carly Fiorina, who was a disaster, the board replaced her with Mark Hurd, the only CEO there who, over the past decade, had done anything approaching a good job, but whose exit was handled poorly. (Search to read about his ouster.) Hurd was followed by Leo Apotheker, who led the charge for the dreadful acquisition of Autonomy, and he was followed by Meg Whitman, whom I don't see as a savior there.

The point of all this is to note the metamorphosis that occurs at many companies as they go from being the darlings of the growth stock community to "value" stocks. One must be very careful taking positions in companies making this transition, as it is easy to get fooled about a company’s real value -- and you can lose a lot of money being way too early and paying too high a price.

Do not hurry, do not rest

On the note of being careful, and more important, patient, I took the unusual (for me) step of trading a bit of Apple stock last week. I mention that primarily to illustrate the sort of patience and discipline that is required to be successful when speculating. As I noted in my Nov. 9 column, I did purchase some slightly out-of-the-money calls when Apple was trading at around $580 going into the election, and I lost $4 apiece on them.

I had no real plan to be long, unless the stock traded in a way that made me think the downside may have reached exhaustion in the short run. Thus, when I saw a setup I liked, I bought the stock and wound up selling it later that same day for a $20 per share gain.

The points I want to emphasize are that I was very careful about when I acted, and only did so when I had good reasons and could define my risk.

Now, I’m not trying to pat myself on the back because the idea worked, as I make plenty of mistakes. I simply want to reinforce the idea that patience and discipline are important.

Oftentimes folks don't give themselves credit for the trades that they don't do or the ones that they get away from. (By "get away from," I mean, for example, by owning the calls when I was wrong about Apple, I didn't have to fight the potential "value"

rationalization as the stock price collapsed, and thus a "better" idea, as
of course, it was cheaper, but not necessarily a better value.)

In any case, hopefully that discussion of growth, value, patience and discipline will be useful to folks.

At the time of publication, Bill Fleckenstein was long Microsoft shares.