Hey Sal, long time no post. Here's a little quote from today's NYT I though you might find interesting:
But an even greater contributor to Monday's carnage, strategists say, was the reverse effect of what has come to be known as momentum investing. This strategy, characterized by investors chasing stocks simply because they are rising in price, with little regard for sensible valuations, pushed shares of the favored companies to levels unseen before in even in the hottest of markets. Now, with these stocks no longer rising and momentum shifting in the other direction, momentum investors sell. And this selling feeds on itself.
"When you're buying something at a very high price/earnings ratio," said Peter Tanous, investment consultant at Lynx Asset Management in Washington D.C. "You've always got your finger on the trigger." (from nytimes.com )
That's the thing I never fully appreciated about Bill Harmond, he always had his finger on the trigger. When that Bill says he's pulling it, I'd advise everybody to pay very close attention.
Hope your career's going well. Is momentum still your method? As to "The barrier to entry is that there is no barrier to entry.", I might actually get that one, but it looks perilously close to "It's unethical to be ethical in business". It's all a bit too subtle for me.
Cheers, Dan |
