j g cordes
I saw the quote you gave from Barron's and my thought was that this bear market still has a long way to go. When managements can steal all the profits and supposedly conservative and insightful business publications can't see it, we haven't hit bottom. I never indicated that DELL didn't have a great business model, in fact, I praised them for the model. What angered me was that none of it filtered to the shareholder.
The strategies you employ would not be considered investment strategies by Benjamin Graham, they would be considered speculative strategies.
If you believe that you have a system of strategies which is lucrative for you, by all means employ them. But when, on this thread, you refer to them as investments, I think you ought to expect someone to call you to task for that terminology.
I am very proficient in the use of technical analysis and do employ it for some of my trading. Looking at the chart formation on DELL leave's me with impression of a rounded top formation which would be dangerous to play from a long position. But, on this thread, I don't often refer to technical analysis because this is a "value" thread started to use investment analysis based on the works of Benjamin Graham as the basis for discussing the relative merits of various companies.
One makes or loses money in the market not due to the soundness of the company one invests in but when one buys and when one sells. The less one pays attention or is right on timing the longer one's time horizon must be in order for the underlying strengths of the company to manifest itself in price appreciation. If there's a dividend, that too becomes a factor.
Obviously I disagree with your premise. The soundness of the company, the commitment to the shareholder, and the price one pays are the key ingredients. There has long been a debate over whether the price WEB pays for a company can be considered market timing or not. I view it as not being about timing, but about value. The two factors sometimes seem to coincide, but that is more accident than goal.
It may be argued that timing a stocks price or timing the market is impossible, it in fact does happen and is the holy grail of funds, hedge funds, derivatives and futures players. Our behavior, both as individuals and as participants in group behavior, move prices up and down.. we are always timing the market by the choices we make.
I don't hold the opinion that technical analysis can't be used for timing a purchase or sale. On this thread, however, technical analysis is not the criteria for whether to buy into a particular investment, some of us may use it to help determine when. But what you describe above is speculation (a purchase decision made on some basis other than deep fundamental value), not investing as described by Graham. The current trend in extreme daily ranges in prices of the major indices is, indeed, indicative of widespread speculation as you describe here. Just because something is pervasive, doesn't validate it. I do take this level of volatility as further sign that this bear is no where close to having run its course.
The logic which makes a Dell unattractive because of its options exposure is irrelevant within price swings and trend probabilities.
When fundamental danger to the well-being of an investor's capital investment can be deemed irrelevant in any context, the mania is not over.
So I hope in your deep analysis you don't lose sight of the only reason one should be in the market.. that being to make money
The fundamental reason I am in the market is to have my investment dollars earn a greater rate of return than they would elsewhere. If I am to assume any risk to principal, I wish to be compensated according to the level of risk assumed.
Money is only made or lost after the investment play is concluded, after the equity or derivative is sold or closed. The rest is just smoke and mirrors we satisfy our egos and insecurities with (all puns intended).
Interesting turn of phrase, "investment play". I would disagree again. Very often money is made or lost long before the transaction is effected.
I can see why you may eschew fundamental analysis if you believe it only satisfies ones ego and insecurity.
As before, I wish you much luck with your approach, I think you'll need it.
Timba |
