To: re3 who wrote (53013 ) 7/24/1999 11:54:00 AM From: Ilaine Read Replies (1) | Respond to
Hi Ike,Where are the Customer's Yachts as well as Riding the Bear. I find that Yachts is a good counterweight to Riding the Bear , believe it or not.Riding the Bear does a very good job of debunking the self-serving "buy-and-hold" research that brokerage firms tout. As he points out, no successful professional investor follows that advice, not even Warren Buffett. Even such "buy-and-hold" gurus as Peter Lynch turned over the investments at Fidelity Magellan as much as 300% per year when he ran it. But Riding the Bear suffers from a belief in chartism, that is, "buy" and "sell" signals, based on MACD, and such. He wants to prevent investors from buying high and selling low, which is admirable, but I question whether chartism is the way to achieve that.Yachts points out, there are people all over the world who study the patterns of blackjack tables, and the like, in order to discern a pattern, and the sad thing is that some of them actually discern a pattern. He asks "If a man has tossed a coin "heads" four times in succession, which do you think he is more likely to toss the fifth time, heads or tails?" If you think he is more likely to toss heads or tails, you shouldn't be in the investment game.Where are the Customer's Yachts is just a pure joy - if only because it tells you what to do when you get a margin call. "Probably the best thing to do is to use the Natural-Instinctive method. This consists of picking up a telephone and telling the broker to go climb a rope, or do anything else with a rope that his fancy dictates, but you won't send him any more money. This has some definite advantages, not the least of them that it helps relieve the feelings. The broker will sell you out and will then mail you some odd change that is left over. Since this amount is too small to put back in the bank, you will probably do something really useful with it, like put linoleum on the kitchen floor. If the stocks that were sold out immediately start booming upwards again you can meet that difficulty by ceasing to read the financial page."
