Responding to your ...
Message 15528145
Hi Medroogies,
No arguments with the thought process you described. Each of us, implicitly or explicitly, went through this process. The conclusion reached via the process is only as good as the inputs considered in the process.
<<1. what is your time frame?>>
I want to have a rising NAV, each and every calendar year.
<<2. what do you hope to achieve?>>
I want to raise NAV on absolute and relative basis, vs the “average”, enjoy it as I go, and not to simply leave a rich widow.
<<3. what sector do you believe has the most opportunity for growth over your time frame to achieve your goals?>>
The following asset classes will do relatively better in 2001 than Oracle: cash, near cash, short put on precious metal stocks at times, opportunistic scalping on whatever extreme movement available in markets.
<<That may mean buy ORCL. It may mean hold. It may mean sell.>>
I only got 100 shares for subscription to annual report.
<<… in all likelihood, over time, if you have good knowledge and good instincts, you'll come out ahead.>>
So far, I am so good, on absolute and relative basis.
<<Dumb luck can take a person a long way.>>
Very true.
<<How many times have you heard the (true) stories of widowed Depression era women who, upon their death, left their families or a charity vast sums of previously unknown value? These are people who simply purchased stock and let it sit.>>
Not enough times to adopt this LTB&H as gospel for strategy going forward with most tech shares, as opposed to Coca Cola, drugs, metals, basic industries, etc. The probability is simply not with us, given “reversion to the mean”, diminishing or lack of free-cash flow, valuation, high-speed obsolescence, shortened product and company life cycles, etc.
The game, and yes, it is and should remain a game, is to firstly not lose, and then win. The strategy must account for the very real possibility that each f us is wrong, and not be seduced by the belief that we are the lucky few to be right.
<<Don't buy and don't hold ...
That leaves Sell.>>
It also leaves “have no meaning position, waiting to see what happens”.
<<Assuming that is the only option - what you're implying is a guaranteed meltdown.>>
I am not saying a meltdown is guaranteed, only more likely than before, and the risks are high enough that any bullish tendencies must be tempered with a conviction that the strategy must allow for each of us to be wrong. The one-way bet days of 1990s are over and done with.
<<If you actually convince enough people to sell, then the very thing that you'd hope to avoid (crash) becomes a guaranteed vicious cycle.>>
I advise folks to be careful, and only that.
If I were holding lots of tech in % allocation terms caused by me having been on a long vacation without access to communications made possible by tech, I would consider lightening up on each upswing, as I would be concerned knowing what bear markets, debt, and mood can do. I have seen too many bear markets, crisis, and mania. I have survived all of them, getting wealthier each and every time, by moving rapidly, decisively, and not by standing still to see what was happening to those around me.
<<I think the point of the article is that it is currently an uncertain period in many respects and that one should tread carefully.>>
Yup, agree, and same for the rest of your observations.
We can all find our own respective panic point by setting the tech share quotes at 50% of current market on our MS Money portfolio tracker, and see how we feel. This is what can still happen.
Chugs, Jay |
