Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Paul Senior who wrote (43886)	8/11/2011 11:28:59 PM
From: geoffrey Wren	2 Recommendations Read Replies (1) of 78480

Paul: I was referring to crazy days when apparently fantastic buys are available. People say they have no cash. But they can raise cash by selling something that is more reasonably priced. Stock picking individuals are always choosing among stocks in investing. Pretty much anytime I buy something I am selling something else to do it. Normally that might be a weeklong process. All that gets compressed in crazy days. I will give an example of something I did on Tuesday (or was it Monday). UMH was holding up well. I checked and it was down something like 10% in the correction that started last Friday, while CWH was down 30% or so (I own both stocks and so previously had an understaning of them). Now one might say this was rapid efficient market adjustments and that CWH was more exposed to a financial meltdown. But I feel that the efficient market theory loses traction in flash crashes, especially for thinly traded stocks, and we should look upon those times as opportunities even while our stomachs turn in seeing all the red on the holdings page. My feeling was that CWH had become a relatively better holding and sold some UMH and bought CWH. So far it has worked out. It was a gamble, but so was doing nothing. Anyway my point is that if you think a stock is ridiculously underpriced, then sell another stock that you think is just somewhat underpriced to buy it. More generally, I was not advocating market timing. My point was that holding a large cash reserve is sort of like betting on both black and red at the roulette wheel. If the wheel is tilted and you think you see a pattern, then make up your mind and just bet one color. Another point I would make is many bonds have stable enough prices. Such a bond is near enough to cash and should be sold if one sees opportunity. Thanks for your comments. This is a worthwhile board. One of these days I suspect I will be buying SVU which gets a mention here from time to time.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next