Hi Drenko:
You are very fortunate that you don't have to worry about the market. I cannot speak for anyone else, but I have to worry about it becuase the bottom line here is the valuation of my positions at the end of the day. Granted that the reasons given for the volatility are clearly out of proportion with the gryrations of the market, but the bottom line is that when you get a margin call, or if your portfolio decreases significantly, it is quite real. I have found that it is much easier to lose money then to make money in this type of market. The trick to being successful in the market is knowing when to sell, not necessisarily when to buy! Buying is relatively easy in a bull market. In a bear market (as with any other market) you stick with the sector leaders that are in favor. When to sell, where you draw the line, is a whole different matter, that has to be mastered. I can admit that I for one have not been able to find the magic formula. If anyone out there has that information, I would appreciate it. Again the problem with these posts, now I am not referring to Voltaire's posts in particular, but in these electronic chat rooms in general, is that we can all backslap eachother when the market is working in our favor, and we can console eachother when the markets are down. We don't generally hear from eachother when we are selling so that we may preserve our capital, a commodity that for most of us is irreplaceable. This is rule #1! Granted that market mentality, especially during a panic downturn (as well as an upturn) is basically primitive and based upon momentum/fear/greed, however, we hear from people that they have invested more money during these downturns. Seems as though there are a lot of people out there with an inexhautable supply of dry powder left in their inventories. I for one do not have that luxury or resources. Selling calls can work for only so much over a given period. I feel that the issues that were raised are quite valid since we are all in this together so that we can be frank with eachother. I recall riding down AOL last year from the April highs down to the autumn lows based upon the esprit de corps of the AOL posters. When it gets down to the bottom line, we have to think for ourselves, knowing what our tolerances are and our max pain thresholds are. My feeling is that we are nearing a bottom here, although I wish to hell that tomorrow was next tuesday and get this damned rate increase over with already.Drawing a line on the naz chart and eliminating october 99 thru mach 2000 will put us at approximatley these levels. Offering eachother contructive critiques is essential for testing and challenging our theorums. Nothing is above reproach. I trust that we are all mature enough to withstand these challenges. Just remember that I love all of you guys out there and that my best wishes are there for eveyone to pull through this ordeal with our physical/fiscal health intact.
Best regards to everyone out there.
David |
