Suresh... OT.............................
Thanks for a very nice post.. let me explain my little philosophy behind my trading style, taxing it may sound but I think you have read me and you must know where I am coming from?
<<But to say that all bears loose out big is kind of stretch... there are many stocks making new lows than highs. Any bear who is not shorting the top 100 stocks but other stocks are making a reasonable amount of money. Maybe not as much as a bull having bought CCU or MSFT or CSCO or DELL or TYC etc....>>
I think, I have traded more short side on SPZ than any bear would ever imagine during the course of recent turmoil?s, below 1313 I had lot of trades which ever purely short trades that is long puts. So your assumption that I consider 'bears' as loser is I beg to state little too much reading in my post..
I have my bear messages marked for the followers of a pre-dominant 'Dr Ravi Batra School of thought' (the crash of 90's), those with a sell word in 90 out 100 posts. Now, when market was below 5000 these very same people talked about CSCO rich valuation at 50 times P/E, they still keep talking about same P/E but CSCO has moved places. Earnings growth is not something that is well understood! MSFT that manages expectations has been target of European fund manager?s scorn for last ten years, on basis of too high P/E. It was considered too expensive at 15$ by leading figures. The concept of ?Gorilla stocks? is never understood by all, only by few, therefore wealth remains tied in few hands unfortunately. Not every one understood how wealth could be created out of KO, the one?s who did are our prophets today, but we are ashamed to remove them from that pedestal although evidence now is against that particular school of investment.
I am from a school of thought that believes that ?PEG? is more important, the dividend yield and P/E ratios have lost considerable significance, I am a NEW PARADIGMER who believes in the new knowledge economy. An economy assisted by ?Technology? that has changed completely the fortunes of mankind, I am one of those who believe in a ?new leap forward? for mankind at this juncture. Not that I am emotional about it, I like my money and would not like to waste it on speculative trading or holdings, to suggest that I am with the crowd or masses is little injustice to my whole outlook. I am rather only raging bull with few others on SI, not many a bulls have stayed long enough, they get turned off very soon with huge noise and total lack of comprehension of basic tools of knowledge economy, like man of Prof. Krugman caliber took five years to come around to fully appreciate the ?productivity gains? and its impact on traditional employment inflation relationship, buy the way just 5 years ago below 5% unemployment figure would have sent shock-waves and interest rates as high as 12% would have been very conceivable. Now 4.2% is acceptable and I think by 2001, even as low as 3.8% would be acceptable too if global budgetary deficits remain under control and OECD governments resolve to get off the back of people is maintained. The shortage of funding by governments may lead to bond rallies but it will not be by default like ?flight to quality appreciation? like the one we saw in Sept 98, it will be as a result of good economic governance and proper fiscal and monetary policies..
<<If I remember right, you were buying property in france and other places when no one wanted and you profited handsomely when the true value of those properties were discovered by the masses. To discredit Warren Buffet just because he doesn't invest in technology is trying to compare apples and oranges. I like Warren Buffet simply because of his style and sincerity. He invests in things he believes in and sticks by it. On the other hand your approach seems to be more geared towards the opinion of masses these days (pure speculation on my part...I am sorry if I have misunderstood you). There is nothing wrong IMHO with either approach.>>
Yes, you are right like Warren Buffet, I have a vision, may be larger than that man ( I assure you that it is not an insult to his ability, a reference only to changes of time that can produce SUBJECT geniuses, after all Laplace and Al-Kawarizimi (the father of algorithm) would not be able to handle third grade math?s of today that does not mean a third grader has better understanding similarly we the new paradigmers may be in that class with a benefit of doubt).
I don't disrespect that man. I am his great admirer, however I think he has missed the train and failed to understand the revolutionary aspect of this tech based revolution we are seeing unfolding before us. I am not overawed by him and rather I find his view on present stock valuations little too old-fashioned as he is using ?Newton?s Laws of motion? where ?Einstein Relativity theory? is even unable to answer some questions. Now, I am not overawed by him, may be that is offensive for people who treat HIM AS PROPHET OF INVESTEMNT. I will not like to live under his intellectual shadow, which may be another offence, rather in my little world visited by my own-self I open up my mind on this thread and try to venture into areas where I would like to learn more. I am like a small ?soldier revolutionary?, which pins that ?edict? on the doorstep of the ?Catholic Church? that challenges the prevailing conventional wisdom. I am foolishly optimistic about this ?crusade? but allow me to live within my own world.
Whatever so far, I have ever done is not normal, I challenge, I may be wrong, but I never ever follow masses. I make my own mind and that is thorough extensive reading and extensive hard work that I relish. After all I need to know that ?mediocre? like me are available ?dime a dozen?, so we need that extra bit to understand, but that said, I also know and fully recognize that no one calls the market like me on daily basis on SI. That is something a very tall claim but I am comfortable with it, as my posts are my evidence. To keep that envious four years record, I need to be a maverick, original and competent visionary. I don?t interfere with lot of people, rarely have time to visit other sites and naturally due to my own style my thread is an extension of ?inner discussions? like what I am engaged in right now, the futility of this is well appreciated but the exercise to touch some points and visits some issues encourages me.
Internet provides me with that door to pin my innocent grievances. Wrong they may be, erroneous they may sound, little they may impact, but bottom line, my trades are at the cutting edge on the long or the short side. Is that not the purpose of this thread, I trade both sides but only when my levels are broken like 1313 or reversal like 1267 SPZ now why anyone else cannot do it, so specifically? This is not easy and it requires a lot of foresight and KISS. I tell you this bull shit about keep posting sell messages destroys many a talented traders, even a stopped clock is right twice a day a repeated argument but fits in well here. But when market is probing new high to second guess and call for sell, I tell them never ever sell a market making new high any old hand will tell you. I would rather put my sells below 2488 on NDX and that also with a quick nimble style. I will move in get the juice out and let this 1318 break on SPZ to confirm the direction, that I s how over the years I have learnt to trade inter-relational levels and indexes, no one can call the market as it moves from bounce of 20 50 or 200 days ma to make a new high. Few individual stocks can be shorted but shorts have a difficult bargain, the loss is always unlimited, unlike a longing a stock where the loss is limited to the value only, you can?t go below 0. So even on risk reward shorts do not fare better, the risks outstrip rewards, I suggest that we should rather buy puts when we feel strongly about a fall.
My thread keeps a balance amongst overwhelmingly bearish sentiment of the SI, those very few who visit me have so far saved necks by not being whipsawed, always realizing that it is winners takes it all game. We were amongst the leaders to highlight this winner takes it all phenomenon. Cisco?s SUNW?s MSFT?s GE?s SNE?s INTC?s IBM?s NOK?s LU?s and COM?s too are some of the stocks we picked and lived with them for last four years, it was not in 99 we realized that NDX is a great index it was in 96 when I started posting
Now a dog before a hanging bastard or a cat getting screwed in front of singing crows, I tell you is gross charlatanism, it is blatantly practiced I am a lone fighter that openly tell these ?crooks? I know every word what you write and they know it that their entire ?exotic erotic edifice? will fall if they ever try to look back for last three years, log these posts and you will see travesty of trading walking tall and kicking shamelessly. These guys were saying similar things last 8th Oct, they were screwed so royally that if they were ?traders? they would think twice before posting again, but they are not, they never ever trade. In my posts to these perpetual shorts, I highlight the pain they have suffered by highlighting the basis of the calls they have made, in the process I try in my own ?foolish mind? to save a lot of gullible readers from problems, and that is hugely acknowledged as it is established reality say that ?my PM is extensively detailed and rarefied phenomenon..
I know too well, so for me challenging Buffet has no impact. However what you fail to realize that in ten years from now if I am around or my children they will take pride that their father understood the ?Intech economy? a little better than Buffet. If I was right!
I perfectly know my size and my limitations, that does not deter me and I also don?t believe that "the future is so bright that I have to wear sunglasses". (Baron?s this week) Billionaire Warren Buffet got his start in the mid-70's, buying up businesses at rock bottom prices, and that now "Oracle of Omaha" is sitting on $6 billion in cash, with "nothing on the horizon" that looks to be a buying opportunity. For me I think he has missed the new economic technology. Let me quote from what I heard recently from the ?gurus? from Merill. From 1971 the price/performance of computing has improved 10- million times, if the same technological change would have come in the auto industry, they would be able to create a car that travels at the speed of sound, runs 600 miles on a thimble of gasoline and costs less than US $ 2.. ( Price Prichett).
Warren sits with his 6 billion $, let me tell you where he got it wrong the technology economy accounts for 15% of the total economy, at the present growth rate it will account for 51% of the economy by 2008. So far only 35% of the world has made telephone call. Year after year, technology grow at 15% while the rest of the economy plods along at 2-3%, now all these proven facts are rejected by Buffet as hyped phenomenon, but should I be one of his or be John Chambers follower who made my ---- CSCO shares into ----- in three years.. Whatever it was I would take Chambers word against Buffet any day, when I bought these shares of CSCOP, I remember Buffet writing in a news letter that future belongs to G and KO. Who got it wrong after all, it was he and not the new paradigm of Intech-technology, and he will be wrong again, as his bonds will give no eggs. The era of tax and spend is over, even notorious Brits leftists like the Blair crowd are now known for great thriftiness, they want to save and cut taxes like Lionel Jospin and Schroeder in Germany, when the left changes color, it is like Leopard losing its spots.
Money and cash is worthless, it is the ownership of few of the choicest companies in the world that matters now, those who own the brands and technology, and you are right. Dare not ever touch NDX 100 to short, they bite and leave such a mark that not many survive the aftermath. You see with your own eye?s that NDX is making new high with SPZ still down 100 points from its high and IBM MSFY INTC are still languishing on Jan 99 levels. It is not about honesty of Buffet, I have triggered this debate intentionally as other threads will learn from it and if I am wrong will get this on my chin. The provocative ? heated argument? gets the best out of me at-least! When one sector lags the other lagging sector comes into play, if SOX is down the DRG bounces with new earning momentum as BKX hits 720 and rebounds! So the market has its own dynamics, one needs to know them well.
I am the only writer on my thread and I take pride in that to keep it alive, my whole discourse is treated with ?nothingness and total silence?. I know that well rarely ever, anyone replies or asks me a question in open, but I know what I do, I recap it every day, so rest assure that I agree that in the process I don?t ever forget my limitations, my little size and I don?t get carried away with false pretensions, but I have learnt to know that ?sticking firmly to the ground? gives every human with powers that can satisfy and bestow new ?limitless mental curiosity?. For me that is also the purpose of my self-discourses. I like Buffet so much that I wish I could have his vision to see ?future? like he did in case of his investments, I know one thing that following him would have led me to no where and attending BRK meetings are not going to give the answers, they have to be new rules and I am actively in search of new rules. I intend to work these markets with new rules and it is inefficiencies.
Tat said, sometime I think of this ?Intech revolution? as largest event in annals of mankind you want to judge it by discounting future revenue stream to justify current price, how unimaginative, I sit an order AMZN books in cyber space and I receive them in few days from US, the concept is not prisoner of 'geography' the geographical limitations are compromised, it is not about neighborhood concept or regional concept of trading it is truly about 'global' mart and global free trade, now if that is something speculative than I agree that I am a part of the crowd, I know it I am not, I can see the market levels so nice for one reason, not that I am too intelligent but I understand this cyber business as good as Buffet understood sweet water Coke business! Any problem with that! I don't think it should be, I don't carry that inbuilt complex to be deterred by Buffets and Kurlacks of the day, from where I started I in my modest way have achieved no less, the yard stick is understanding of global issues a little ahead of others, I did that when I got long CSCO in 90?s years back or had the courage to write as second message on this thread 'wage inflation is dead', now these are no mean statements, to go long against conventional wisdom and pre-dominant neighborhood view was something that I got from comprehension of far reaching impact of tech on 21st century. I am surprised that you take me as a trader, it is not the trader in me that is right and shocks everyone that leads to pin drop silence on my thread, it is the bird's eye vision part that makes me trade the way I do.. For my bullish stance I will repeat what Michael Murphy has written that the demand for technology will end when everyone in the world has a PC that can be asked in any language to provide any desired data or calculation and it does so instantly, anything less can be improved upon. I have my own definition to this whole thing in my opinion the demand of tech will grown until we have 11 billion computers networked together, that will signal and equal 11 billion neural connections we have in one single brain, once that happens new human consciousness will give rise to one quantum leap in evolution that may be as significance as emergence of life itself..
P.S. Suresh.. it is quarter to one here, I have to go to bed and I have just covered the first part of the question.. I will like to cover the second, I thank you once again, you were nice and kind and you helped me to release some things I would have not had it not been your post, so thanks and overlook if you feel that my point of view is banal.. Regards and bi bi take care and lets continue this discussion.. I have taken too much of your time but I am sure my children will love it tomorrow morning as they read the ?Idea thread? my most regular followers other than few S&P traders in the pits who cannot digest food without my post.gg .As a father this is also my school for higher studies of my kids. ggg
<<Since you are so bullish on AMZN and YHOO.... could you project the earnings of either company going forward 10 years and discount it back to current pricing to justify it ? I have very hard time imagining that they will grow going forward at the same rate as they have done in recent years.>>
This deserves a long session with you and we will talk one of these days again, great question and observation... but Yhoo and AMZN are momentum play and please note that I keep buying out of the money calls..I have my observations and as such have tired my best to take advantage of this momentum play but I think that business models of these companies are not suspect.. why..to be continued...... |
