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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Pirah Naman who wrote (48271)	10/24/2001 5:12:28 PM
From: Bruce Brown	Read Replies (1) of 54805

That paragraph could as easily have been written with TA and valuations reversed in place. There is sufficient record around SI that one could as well have been banging one's head regularly about a tech stock's TA, and that this head banging could have been avoided through getting out when valuations were too high. There is the tool, and there is the mechanic that uses the tool, and they are not the same. Yes, one could have been banging one's head for many reasons. Technical analysis does not predict what is going to happen, it only reflects what has happened. However, it does help illustrate the trends and until a trendline is broken - there is no need to bang one's head on the wall. It's no coincidence that the technical analysis follows the trend - or anticipated trend - in the fundamentals. We're in the middle of a nice little mini-trend within the technology sector (for the third time this year). Will it break specific downtrend lines and forecast out an improving earnings environment or will it just meet those trendlines as resistance and roll over? Interesting to watch and no need to bang one's head against the wall about it. Yet, at some point in the future - it will be an important step and plenty of market forces follow it like a hawk. TA also helps recognize trading ranges between support and resistance which can be a useful tool for shorter term swings for entry/exit positions for those trades. It worked on the way up and has worked on the way down. Then again, fundamentals were improving on the way up just as they have been unraveling on the way down as we went through the historical aberration. However, since my earlier vote didn't get recognized :-) I will vote again - let's move the thread back to its roots. You can chat until the cows come home about competitive advantage, gorilla value chains and what not. If you see a value in a technology company that has enough potential as an investment - eventually you have to make a decision to purchase the equity for your portfolio. Wouldn't it be nice to purchase that equity using a risk/reward scenario that has the highest chance of success - or at least a higher chance of success than at a time when the risk/reward scenario is not stacked in the favor of success? Hard to imagine such thought process is OT for the board, but I will yield. BB

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