Value Investing and the quick round-trip....interesting discussion!
Like most posters here, I search for those companies that I believe offer a good return on (and "of") my investment, and I look for those opportunities the market provides to purchase these companies at a discount to what price would interest me.
Like Don, although I approach these companies and my investment in them from a long term perspective, if the market quickly corrects its mis-pricing of the company's stock, and I'm sitting on a large (percentage-wise) gain, and I think the move has been too far, too fast, I'm not going to sit around and watch that gain dissipate just to satisfy my urge for long-term investing.
If, on the other hand, the gains are more moderately achieved and roughly in line with gains in performance of the company's business model, then I have no overwhelming urge to take a 40 or 50% profit just because it's there. As long as the company performs, and long as the price trades at or below where it makes sense for me to buy more, I will continue to own it.
Also, like Don (if I read his approach correctly), I use TA quite a bit for trying to determine the longer-term pricing patterns and the implications those might have for my decision-making. I usually use TA only after my decision to buy has been made by valuation analysis or after my price-point has been reached and am considering sell strategy.
I see no inconsistency in selecting a company in part because the business outlook for several year down the road looks interesting, and then selling after only owning a few weeks or months. If the market gives the reward that quickly, I take it!
Timba |
