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Strategies & Market Trends : Value Investing

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To: Shane M who wrote (4755)	8/22/1998 1:46:00 AM
From: James Clarke	Read Replies (2) of 78618

Relative strength - I have scoffed at it too, but in this kind of market, the value stocks with relative strength are the ones that double. The ones with no relative strength are the falling knives. I have learned that the hard way, and I don't think I'm the only one. Listen to this - he's right. You all know that's not how I invest, because I buy tiny or weird stocks. But if you want to buy anything institutional quality that "looks cheap", Shane's advice will save you a lot of misery. New Holland (which I am down 40% on) is just one of many cases in point - if I had been listening to people like Shane I'd still be drooling on the sidelines over this gem. Maybe it meets the relative strength test when it has already popped 10% from the current level, but that would have gotten me in at 13 instead of 19. This is an idea to be explored, not dismissed. But it is so difficult for value investors (including me) to buy something going up. If I had waited on New Holland, then it popped 10%, I'd probably act like an idiot and say "I missed it." That's a mistake I've made so many times...one of these times I'll learn from it. Jim

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