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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (7395)	10/3/1999 5:12:00 PM
From: Sam Johnson	Read Replies (1) \| Respond to of 54805

Mike, thanks for the kind words. I have to admit it's a bit intimidating posting here for the first time, with all the wisdom and insight everyone brings to the table. > The best example I can think of that supports that > thought is the example of Cisco Systems. Investor bias > helped propel and sustain the stock at higher and higher > levels. I agree - I was thinking partly about Cisco when I made the post about bias. Soros makes another interesting point about investor bias. He claims that when bias is strong (positive or negative), then any reversal that the market or stock recovers from will actually reinforce the bias. That's straight out of behavioral psychology (I'm sort of a psych. buff)...when reinforcement isn't continuous, it strengthens beliefs rather than weakens them. Cisco makes a nice example - you've written here about their many 20% - 40% corrections. Every time they came back, it served to reinforce the perception of their strength. The entire internet sector is probably a good example for the past few years - every time the sector recovered from a correction, it ended up in another frenzied run. I have to remind myself that this is only a relatively small part of the game. The fact that Cisco has had a lock on their market probably has something to do with it. <g> But since perception is so much a part of the GG theory, it's nice to include it in the whole picture. Sam