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

To: freeus who wrote (22378)	4/6/2000 6:01:00 PM
From: rushnomore	Read Replies (1) \| Respond to of 54805

How are you saving your wealth from being lost in this correction? I've lost about 20%. What should I be doing that I'm not? You asked DownSouth, but here is my opinion. From a peak value on March 9 to the low point on April 4, I lost about 25% on paper. In the last 2 days I recovered about 5%. I am holding, and converting some mutual fund shares into more CREE and SEBL. Thanks to the wisdom learned from TFM and this forum, I did not panic like I would have done if this correction had occurred a year ago. EDIT: As of today, I am still up about 31% year to date.

To: freeus who wrote (22378)	4/6/2000 9:42:00 PM
From: Uncle Frank	Read Replies (2) \| Respond to of 54805

>> How are you saving your wealth from being lost in this correction? I've lost about 20%. What should I be doing that I'm not? Turning off your computer and re-rtfm'ing. You keep losing sight of the Gorilla Game, freeus. At the moment your "losses" are temporary. Try outguessing the market by making timing moves (such as "slowly getting into cash today, tomorrow and next week") and you'll make your losses permanent. The GG is a ltb&h strategy. Why do you keep fixating on trading techniques? uf

To: freeus who wrote (22378)	4/7/2000 10:02:00 AM
From: Tom Trader	Read Replies (3) \| Respond to of 54805

Freeus re How are you saving your wealth from being lost in this correction?I've lost about 20%. What should I be doing that I'm not? I distinguish between tax-sheltered and taxable accounts; in the case of tax-sheltered accounts, I liquidated all positions prior to the recent correction. My rationale for doing so was that I had achieved a close to 50% return since the start of the year -- and I was more than content with that return. From a purely rational stand-point, in a somewhat irrational market, I was convinced that this rate of return was not sustainable. I was confident that I would have the opportunity of re-entering at some point at better entry levels -- I will admit that I did not expect the opportunity to arise so soon or for the decline to be as severe. In the case of taxable accounts --which represents a significant portion of my assets -- it is a lot more complicated because of the tax effect of recognizing gains -- and thereafter the incremental return that would need to be achieved to make up for the taxes. There is also the issue of short versus long term gains. Regrettably, I was hedged to only a minimal degree and so I have seen the same adverse impact on my equity that you have. The tax effect is a real one -- and cannot be ignored; however, there is a well-known axiom that one should not make investing/trading decisions primarily based on the tax ramifications. The most expensive lesson that I ever learned in this regard occurred in 1996 when a start-up company that I had invested with, in the late 80s, went public. I could not sell any of the shares initially because of lock-up provisions -- by the time that I was free to sell the shares, the price was substantially higher -- and it was in the fourth quarter of the calendar year -- so I decided that I might as well wait until the commencement of the next year. There was also talk about a reduction in the long term capital gains rate. Needless to say, a combination of events caused the price of the stock to decline sharply before the end of the year and the amount that I lost as a result exceeded by many times the savings that I would have achieved in taxes. It was a very expensive lesson. In summary, I will take profits in tax-sheltered accounts from time to time -- especially when I have achieved returns on a particular stock that seems like a wind-fall. On taxable accounts, although I am still cognizant of the tax implications, when things get frenzied or the market seems vulnerable I would consider reducing my exposure. How to best reduce that exposure, without full-blown liquidation of positions, remains my challenge.