Art B ....
You & your comments are HIGHLY welcome here.
Intelligent discourse is never a problem here and personally, I wish the we had more contrary opinion - as long as it's not of the petty jealous, ankle biting-chihuahuaian nature.
But, certainly you can understand the backlash against the analyst community of late ?
But regarding your comments of :
1. "paying lots of your profits in commissions"
...you lost us there Art. At $9.95 a trade, or less - for up to 5,000 shares; our commision costs as a % of profits is miniscule and is one of the primary advantages for individual investors.
2. "because I find it intriguing that so many of you have such a short term outlook, and are thereby reduced to making quick trades,..."
...Art; we're not daytraders here - "swing traders" would be appropriate perhaps. But, the primary driver to our trading pattern is the sector itself. The volatility of the fundamentals here - earnings, cfps & obviously commodity prices themselves, dictate reacting quickly to changing fundamentals AND technicals. We often "trade the traders" (Institutional Mgr's) here - as much as we trade the fundamentals. Playing the somewhat predictable directional flow of Institutional momenteum money has not been that difficult.
This is not an emerging growth sector... hell; Lee Raymond the CEO of Exxon, a company that just made more money in 1 qtr than any company in global history has a favorite saying that drives home my point:
"30 days is a long time in the Oilpatch"
You can't bring emerging growth & Buffetesque techniques to a highly volatile short term commodity oriented, CYCLICAL sector. Buffet doesn't trade cyclicals & volatile commodidity oriented companies... Ben Graham analysis & Buffetology in general are more germaine for buying traditional mfg, retail, or brand companies...These stocks don't even trade on PE's, or EPS either early, or late cycle etc. I have to strongly disagree with your comments on this. We bring techniques which are a blend of TA & FA along with some "black art" sentiment feel-reads because that is how this sector operates.
Hell, an OPEC meeting result can make, or break an entire cycle; a legislative decision in California can reverse a trend, economic events unfolding today can spell disaster 6-12 mos out in the patch etc... the one thing that I am certain of in this world - is that LT buy & hold, traditional Buffet value - longterm techniques do NOT work in volatile cyclical sectors. Surely, there are companies within some sub-sector niches that over time, are good LT buy & hold candidates... XOM has been, the power producers, especially some of the new emerging niche areas may be if you get in early etc. But they often do not outperform to the upside - the more volatile OSX pureplays & we're here for the greater reward upside to the more volatile, more cyclical pureplays - and LT buying & holding does NOT afford market outperformance there and as an Institutional manager - you can't possibly afford to hold OSX stocks thru a down cycle imho... how many managers will ride out BJS from $60 to $18 to $70 over 4 years ? - actually the question shoud be; given the known volatiity - WHY would you ? If you play here - it's all about getting in at/near that $18 and then getting out at/near that $60-$70.
3. "I believe that no one can be a successful investor, or expect to do substantially better than the market, without a legitimate theory of investing, tailored to his or her own particular financial needs and goals. The simplistic idea of making a profit and then cashing in is not enough to withstand the often irrational ups and downs one sees in the markets--ups and downs often precipitated by self serving analyst comments."
...Art we do have a legitimate theory of investing - it's built upon a foundation of traditional contrarian & value investing... but, with a strong (if not necessary) short-mid term cyclical flavor. The keyword there being CYCLICAL... as the name itself implies volatility & Buffetology/LT buy & hold is more oriented toward somewhat more simplistic & less volatile emerging growth, or out of favor value plays.
The great thing about contrarian cyclical investing is the "herd" is allways late getting in & allways late getting out... has been for decades & "if" - and that "IF" is a biggie; ... if - you can obtain a "feel" (the "ART" of trading) for the market in addition to mastering an effective level of traditional Fundamental & Technical analysis (the "SCIENCE" of trading) - then cyclicals and their inherent volatility offer greater upside reward than any LT buy & hold traditional growth/value metric will imho.
PS: ... it's not just "Cashing in quick profits" ... it's the realization that cyclicals offer (if not OWE) us profits in BOTH directions and the darkside... the SHORTside is not as dangerous, not as difficult and not as mysterious as many would believe.
When we take quick profits - we are taking what the market is giving us in many cases as cyclicals often have double,triple,quadruple bottom-trading ranges in both early & late cycles. These offer tremendous trading opps - especially on a TA basis... it's those "take off" legs - the moves like OSX 48 to 72 in 4 weeks in the spring of 1999 for example, or the ramp from OSX 80 to 120 in the spring of 2000 that gave one all of the entire cycle move - a 250% move from the bottom - that all occured in 2 very short burst legs - both in that very seasonal "march to may" run... given this type of return in these very compressed time periods - why the hell would anyone try to import Buffetology techniques to a highly volatile weather, war & commodity oriented cyclical sector ?
Art... we're a blend of old school - new school here.
We both respect & fear history... unlike our new paradigm brethern daytraders & tech mo-mo buddies who thought Nasdq 5000 was only a half-way pause to the top... they ridiculed Buffet for refusing to participate, ridiculed Julian Robertson, Stanley Shopkorn , Soros etc when then walked away, or closed up shop - shaking their heads, commenting that the market was not making sense etc... we didn't - we understood, we knew it would end & end ugly. But, we are also willing to make use of new tools, new technologies and above all - we use "feel" - the "Art" of trading to play the somewhat predictable money flows in & out of cyclical momenteum oriented sectors to trade upon.
We believe that "art" must be used in conjunction with "science" and I think that this thread does a better job of merging those two techniques than most... sometimes we give more weighting to FA, sometimes to TA & sometimes it's all auto-pilot "feel" ... using the "art" of trading - as opposed to the "science".
But... we are not oppossed to the theory that there can be more than one road to the same destination at the top. We're just interest in the short cuts - that's all (VBG)~
... and by the way Art; got gold ?
- I had to ask (VBG)~ |
