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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Herc who wrote (5155)	11/3/1999 11:59:00 AM
From: OZ	Respond to of 18137

To each his own. I'm kind of eccentric by nature. But I'm coming around to playing with the herd, but uncomfortably. Herc, You ARE the herd if you are averaging down and the discomfort thing is good because discomfort and profit walk side by side... OZ

To: Herc who wrote (5155)	11/3/1999 12:25:00 PM
From: Michael Friesen	Read Replies (1) \| Respond to of 18137

I have to jump in... More power to you if you've found a technique that works. But I would not advise it to anybody. Suppose you were Japanese and used this technique in 1989-90 on a few "solid" companies that were trading at a (for that time and that market) reasonable PE of 30-40, with good growth prospects. You would then endure a bear market for a decade. The PE valuations might drop to a fraction of the previous. Consider that many "solid" Dow stocks had a PE < 10 in 1981. Two more thoughts: 1) A picture of Paul Tudor Jones, a great trader and money manager, in his office. Behind him on his wall is a handwritten sign "Losers average losers." (www.paultudorjones.com) 2) A few years ago I bought Shiva Corp. (SHVA - anyone remember that one?) for a daytrade. The point where I bought it was just a few ticks below its all time high. At the time, I believe the fundamentals were excellent, although I was trading it technically and didn't care. Needless to say I got stopped out and lost something like 5/8 on the trade. Averaging down would have been a very bad strategy. No disrespect - just a strong opinion.