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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Tom Trader who wrote (16347)1/25/2000 3:01:00 PM
From: mauser96   of 54805
 
Market history shows that despite the fact that participants claim to be LTB&H during market upturns, a large number of them will panic and sell during a bear market. The number of market investors decline, so since the number of shares remains about the same, this implies that outstanding shares tend to concentrate in fewer hands at lower prices. Presumably these are the ones less prone to panic. I have seen some figures on the Japanese market, and the pattern is the same.
By their nature, GG stocks are volatile - they go up fast, they go down fast. You are right about that gut wrenching feeling - since it's a feeling, an emotion, maybe there's not a lot you can do to prevent it. However, the gg gives you the best basis I know for a rational non emotional approach, which hopefully will allow your intellect to over rule your emotions. People who hold stocks based on recommendations by others or because they have gone up lack this intellectual support.
Often the only way to know how good you will be at this is to live through a nasty bear and see how you react. As you know, there is often a disconnect between the "intrinsic worth" (however you calculate it) of a company and it's stock price. The gg teaches us that gorillas are likely to be long term under valued on a long term basis even when the market is high, thus substantially reducing the chances of "abject failure".
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