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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (20406)	2/13/2000 5:06:00 PM
From: DlphcOracl	Respond to of 57584

American Spirit: Several of the stocks you have mentioned are good examples of stocks I would avoid, for the following reasons: MXTR: The hard-drive disk sector has BRUTAL competition and pricing pressure, amongst the most cutthroat out there. There is not one stock in this sector that has done well in the last 2-3 years compared to the NASDAQ. This is an example of bad sector analysis. IBM: A behemoth that has lost its way. It is dominant ONLY in mainframe computers, which is passe for this decade, and is struggling to establish leadership position in more favorable sectors (e-commerce, B2B, enterprise software and support, etc.). However, they are late to the game and are playing catch up with stiff well-established competition in every sector. They are a good example of a formerly great company who now does a lot of things, none of them especially well. Throw Hewlett-Packard in this category as well. LU: A company who simply missed the boat. They have great R&D and some of the best fiber-optic products out there. Trouble is, only 30% of their business is in this sector; the rest is in networking, long-distance telecom products, etc., which have much lower profit margins and/or strong competition (CSCO). Additionally, they are so large that their cutting-edge fiberoptic products do not impact their bottom line the way it does for a smaller, nimbler company such as CIEN, SDLI, etc. Simply stated, Nortel Networks (NT) has eaten their lunch and will continue to do so. My money goes to NT and Motorola, which has re-invented itself by cutting its losses in less profitable and technologically outmoded sectors, focusing on CDMA-based wireless products. It will be several quarters, at least, before LU digs itself out. Remember, before they tanked for missing earnings this past quarter, they has a MISERABLE year in 1999 and were flat in a year when NASDAQ was up 80%. I know, I made the mistake of holding this dog for most of 1999 while NT ran up nearly 200%!

To: American Spirit who wrote (20406)	2/13/2000 5:12:00 PM
From: bobkansas	Read Replies (1) \| Respond to of 57584

Sorry American Spirit, but I am going to bug you a little more. Reason, I see some of myself in your emotions towards trading. Only point that I want to make is that you have over the last several weeks been focusing way too much on your overall portfolio losses RATHER than accepting that what is, IS. That is, accepting that this mess or whatever you call it is what the market (that none of us control and which could care less if we make our self-imposed goals) has given you. I know that when I do that I will not trade or invest well. I am distracted by my realization that I screwed up. Such is part of life. You do not have to be perfect at this. When our ego gets valued by how well our portfolio is doing we run greater risks of losing. I know. Right now I am lucky as hell and am trying to focus on being objective about my stocks, the market in general, and especially my own subjective feelings about fear and greed. I am really preaching to myself. I have lost about $32,000 over the two months from being in on-line brokerage stocks. I sold most in January and the rest recently. Yet my overall portfolio is UP in 2000. I diversify into too many tech stocks in all the various sectors that are pretty hot. My problem is that I do not want some real future downer stocks to kill off my portfolio or my return. DlphcOracl is right on track. I just do not yet have the courage to cut down the number of stocks I own. Sorry to go on forever. I will shut up. Good day to all. Best regards, Bob

To: American Spirit who wrote (20406)	2/13/2000 5:21:00 PM
From: Rande Is	Read Replies (3) \| Respond to of 57584

It's OK to sell too early. . . as long as you buy back your shares before it is too late. The biggest gains in this game are made by buy and hold investing. . . .If you insist on trading. . then take profits when a stock is still cheap, and hold your still large amount of free shares long. But you must put these shares away to resist the temptation to sell when nothing is going on. . . . that is the secret to long term investing. For instance, buying 2k of LPTHA at $7 in November. . .you could have sold 1k at $14 and you'd be holding 1k FREE. . . no reason to sell FREE shares until a young stock has reached full maturity. . .which could take several years. Spirit, you have picked some winners at great prices. . . .while it is fine to take those profits, it may be better to believe in the picks you have made and take back your principle, rather than profits. . . .today your little list would be quite hot. Similar to our Long Ports from last year. . . with stocks up 1200% to 3800% in a little over a years time. . . try getting that from playing penny stocks or any other sort of trading. And the key reason to why my long portfolios have consistently outperformed every mutual fund in existence is that they are NEVER traded. . . ONLY held long. The only change I would make when we turn these ports into mutual funds, would be selling off the obvious losers at some point, and reinvesting that money. . . .very hands off approach. . . . which teaches us something about how we should handle our own long portfolios. . . . it is SO tempting to over trade. .. and try to force something to happen sometimes. . . . when the best thing we can do is walk away and forget about it. The bull rages on. Rande Is

To: American Spirit who wrote (20406)	2/13/2000 8:02:00 PM
From: Joe Smith	Read Replies (1) \| Respond to of 57584

Spirit: As long as things are going well, over-trading and selling too early has little effect. You keep moving the money and the money on to new investments and they keep growing. But, it's kind of like musical chairs, when the music stops and you start taking losses, those gains that you could have had start to really stick out. To invest in stocks that are misunderstood and in pullback mode, you have to believe in them. ORCL, GBLX, MFNX, WIND, CMGI...You have to ignore what everyone is saying and when you are proven right, you have to understand that these issues that were really undervalued, may very well get overvalued as they regain favor. By the time the stock goes up you have ingested so much of the naysayers BS, that you have actually started to believe it and you sell quickly when it gaps up. Won't it be tempting to sell UIS at $40-45. Maybe that is all it really is worth. I say, don't do it...Be glad that you have added a great comapny to your portfolio at a great price. When it starts to get too big, sell some to rebalance your protfolio and take those profits. This is age-old investment wisdom and I think it works really well if you apply it to a chunk of your portfolio. Just make sure that you also apply part of your money to a more aggressive stance. I look at this conservative part of my portfolio as my savings account. BTW, I sold a big chunk of ORCL at $48, thinking I was brilliant with my quick 100% gain. I was sure LE was going to do something to piss off Wall St again. He did disappoint the next quarter and the stock went briefly back into the the 30's. I missed it!!! Should have at least added some at that point...