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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: mmbw who wrote (25762)	6/4/2000 4:33:00 AM
From: shamsaee	Read Replies (2) of 54805

Well done in my opinion.I was attending a business gathering at the British Embassy this morning.I ran in to a friend of mine who,I had not seen for a couple of years.He used to work for M.lynch and now works for a swiss investment bank in Geneva and handles some clients in the Middle East.As it goes without saying there were a number of us who started discussing the US Stock Market.I was honest enough to admit how I took a serious knock in the last 2 months.I also rationalized my holding through out April/May that they will come back. A few interesting comments he made.In Normal market Conditions that is very true,however these are extreme markets and speculation at its worst that he can remember(stocks dropping 50 points in one week and regaining it the next week).I asked him what criteria he uses for selecting companies and entry and exit points.His first response was FA of sectors and FA of individual securities.TA of general market for entry and exit points.He said he only Uses TA to gauge the market and not individual securities.He also stated that he uses other indicators i.e. Money Flow,interest rates,Dollar exchange rates,economy etc.etc. He asked me what I viewed as long term and I replied 10 years.He said one of the main reasons those tools are being utilized now a days is that people say that they are long term investors but in reality they are short term.He said most of his clients view 5 years as very long term and expect high returns.He also pointed that the 90s being a secular bull market has changed people perception of investing.Every one wants the quick rich approach. He also pointed out that the true metal of long term investors is tested if you go into a bear market where you don't have huge drops but the index losses 20 to 30 points a week for a prolonged period of 2 to 3 years and most people can't take the slow bleeding and check out because job losses are frequent and people start liquidating stock positions to cover their expenses and at many instances sell at the lows. His last words were to diversify some of my investment in the form of Bonds and CD's from my profits on stocks.I know it sounds boring and old fashioned but It does make sense. The lesson I took from our conversation was,before any one decides to be LTB&H investor(10 years minimum was his words),you should prepare for the worst and have adequate reserves set aside.

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