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Pastimes : G&K Investing for Curmudgeons

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To: Uncle Frank who wrote (89)	11/29/1999 7:31:00 PM
From: lurqer	Read Replies (1) of 22706

exhibit pongid traits. How was that, Lurqer? Yep, knew there wouldn't be a problem. "And now for something completely different" In the spirit of Personal insights are welcomed, as they will allow us to know each other better. I will offer a market perspective (although no great insight should be inferred). As a believer in KISS the following is simple to the point of being simplistic - but it works for me. The perspective is looking at the market from the view of timescales - i.e. when a "play" is initiated how long do you anticipate it lasting. Now most people that "play" in the market use terms like short, intermediate and long term. It's just that no two people mean the same thing by these terms. In order to clarify my own thoughts on this subject, I devised the following hierarchal schema: Grand Scale Short term - less than one year (a.k.a. trading) Intermediate term - One to ten years (a.k.a. LTB&H) Long term - One to several decades (usually played institutions for obvious reasons). Within each "Grand" division, one can divide further - e.g. within Grand Scale Intermediate Short term - two years or less Intermediate - three to five years Long term - five to ten years. The definitions are a "framework" and hence "slightly" flexible - e.g. I would consider a 14 mo. option play to be Grand Scale Short term. The purpose of this exercise for me, was to divide the market into different arenas (sandboxes, playpens) where similar strategies would be efficacious. The "set of habits" that proves remunerative in the trading arena are death in the LTB&H arena and vice versa. This schema has proved valuable to me in knowing which "set of habits" to use for which kind of play. If one further divides "the market" into a domestic and foreign bifurcation - then I have "chosen" to play in three arenas. I have a very expensive "hobby" - Long Term (multi-decade) Foreign - which I play "for the fun of it" (1998 presented "once in a lifetime" Asia opportunities). In looking at the market most of the "fortunes" seemed to be made in the LTB&H arena. Since my "natural" proclivities were in this area as well, I placed most of my capital in this arena. When my "real" job "ceased to exist", I decided to try my hand at trading to "put food on the table". I had no illusions that it would be easy; I had serious doubts that I could "pull it off". I defined a monetary unit - a Sally. One Sally consisted of my last full years salary, including bennies. My criterion for success (and not getting a "real" job) was making at least one Sally per year. I'm still trading but have no illusions about whether it's "brains or a bull market" that is keeping me in the "pink". I mention this here because I believe there is a tendency on the G & K for "group think" to exclude other arenas (or other LTB&H strategies) as less worthy. This can best be exhibited by phrases such as a pejorative "smacks of speculation" comment. Simply because a particular "play" is a trade and not a LTB&H in no way means it is less worthy. JMO Living ... lurqer

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