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Strategies & Market Trends : MDA - Market Direction Analysis

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Jan 30 4:00 PM EST

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To: pater tenebrarum who wrote (22384)	8/6/1999 11:20:00 PM
From: Monty Lenard	Read Replies (2) of 99985

the 'buy-and-hold' strategy touted by every single WS firm will in the end cost many people a lot of money Heinz, I know some will call this ancient history but in a book I am reading about Jesse Livermore(famous speculator in the 1904-1940's) he stated that the "Long Term Investors" had lost more money by not selling when good profits were in hand that all the speculators combined. Now he did not give any stats but that was his firm belief. He went on and named some Wallstreet Darlings of the 1904-6 era that were selling from 200 to 400 per share that were selling for less than $1 by 1940's. I had a broker a number of years ago that I asked "When do you decide to sell". His statement was "NEVER". I thought about that statement for about a month or so and tried to make some sense of it but decided that those stock certificates were just a piece of paper and until someone else owned them I HAD NO PROFIT. So I quit him because I thought his answer was wrong (and still do). He defended his answer by displaying a chart of the DOW for the last 50 or 60 years. What he did not say was that many of the ones that comprised the DOW 50 or 60 years ago no longer existed or were not a part of the DOW in the 90's. The chart looked great of course. I would wager that that same approach is used by most brokers. He did not show me individual stocks charts...only the DOW and the SPX. Now that was before index funds became popular ... I think they pulled that stunt on so many of their clients that some of them wised up and bought index funds. That IMHO is the only TRUE way to participate in that charts that they show everyone. Now I don't own any index funds but if I had been smart I would have. In fact, I am not sure that that is not better than a fund strickly because they are going to keep moving them in and out as necessary to make that chart look good 40 years from now. <g> Monty

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