Hi Bud, I didn't want to let your questions go without adding my two cents. :-)
From Mark regarding analysts:
One feature we can add to our arsenal of things to consider when contemplating a new investment is how well followed a stock is by analysts. If well followed, then chances are it will be the most influenced by the analysts.
Rather than assuming that the analysts are our enemy, we are now using them as allies. Don't trust what they say, just make sure there's plenty of them following your favorite stock. Then when your favorite stock doubles from $50 to $100 with no fundamental improvement in their business you can be sure all the analysts will come out with a prognostication that the stock is going to double again. Sure enough if history repeats, they're going to be wrong and the stock will sell off tremendously. Then, we get to use them again when they all chime in and drop it from Strong Buy to Hold right at the bottom.
In other words, rather than hold them in contempt, use them for your own benefit. None of what they do is bad for AIM!
On Gold:
Years ago I had started a strategy of building a 5% holding in gold and another 5% in "black gold" as a shock absorber for my portfolio. However, after being beaten about by yellow gold, I finally "capitulated" and sold the gold part and added to the energy part. So far this has been very satisfactory. I used the "tax loss" on the gold account and bit the bullet for the loss. The energy fund I used to replace the gold fund has done okay. No shining star, but far better than the corroded gold fund had done before.
As I mentioned in my earlier note, gold has rallied from its nasty lows by a substantial amount already. I don't know how to guess where it will go next. I do feel that "black gold" will continue to do well for the next decade, however. My decision was then based upon comparing uncertainty about gold with near certainty about energy. That made it easier.
Bernie and Mark's "How":
I rolled that account directly from Vanguard's gold fund into their special energy fund. I re-started the account after balancing equity and cash again. I felt it was unfair to burden the new account with the old one's sins! At the time Energy was out of favor and had been for about a year. So, the timing wasn't bad at all.
aim-users.com
I hope this helps a bit. In my case I wanted to keep the "insurance" value of something held dear like gold or energy as a portion of my overall portfolio. So, I substituted black for yellow. Many times we're trying to substitute one stock for another within the same general industry to keep overall portfolio balance. We have to make sure we're making the change for fundamental reasons and not "timing" reasons. If we do it for timing reasons, chances are we'll fail.
Best regards, Tom |
