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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (10735)	6/16/2000 5:56:00 PM
From: Paul Senior	Respond to of 78751

Armin, "But What Do I Know" -g-, well there was lots of weakness out there today. ALSC still looks okay for a company where the parts are allegedly worth more than the whole. Provided, imo, that someone who buys is diversified with a package of other companies having undervalued holdings. Such as perhaps, TRID, SEG (oops), CS, others. I've added back a bit to my small position in ALSC today. Also adding a little more NC. Paul

To: Madharry who wrote (10735)	6/18/2000 1:34:00 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78751

Sunday- big ramble: Here's what's to me a very frightening story from the NY.Times about getting caught up in WAVX, a stock apparently beloved by some internet chat groups. Message 13900421 (I read the story in the Times and then saw the story on SI's WAVX thread. I assume I am not violating any copyright laws by reposting the SI link.) What's frightening about the story to me is that it pokes into my own experience and understanding in ways that resonate but that I can't really explain. How it's scary that normal people who should know better, can get hooked on a particular technology idea or a stock and keep committing time, effort, money to it so that it becomes a significant part of their life. How that intelligent, family-centered people who (from what I can see) have no business experience, no business talent, no sense of value investing, who have jobs that don't go anywhere, but who are young enough to have dreams-- still can't get it anywhere near right when they have acquired millions of dollars of stock market gains by parlaying under $100k on margin. (I'm not intending to be snotty or disparaging to the couples profiled--I'm more worried that I could be hurt bad by the market too.) That neither couple can't say "enough" or "slow down" when they've made a small fortune -- that if they had goals - even $2M+ was not enough, BUT that $2M+ was so much more than what they actually were willing to use, to spend (they were only willing to part with enough to go on a clothes shopping spree for their kids). I mean what's the point -- with 0, 100K, 1M, 2M, maybe even if they made 5M - they couldn't make themselves take money out of their accounts to buy anything of substance or retire or contribute to charity. (Which I see as a value investor's issue too. Value types, imo, generalized a class, are much better at making money than spending it. An issue of balance.) For the couples profiled, they wanted more and used so much margin to get there. They apparently never thought of reducing their margin. And it's something about how married couples ought to work together. Here the husbands seemed addicted. The wives amused/confused onlookers. Not bringing the wives in to understand the margin ramifications was an error. Maybe the men knowing they were overextended, risking the family fortune, being afraid to discuss issues with spouses who, imo, seemed to have better balance, who could've/would've supported their husbands by maybe toning down the men's greed or their addiction to daily price movements, their interent chats. And something insidious also about chat rooms that do provide people with support. Very dangerous. Get sucked into a cult--- we, we -- we know and we are right, hang in there, don't sell, stock is going higher, higher, we need your positive contribution to our thread, we value you, why would you sell and leave our group, our team, our family. And finally, when it was over, what did they learn? These two guys who are teachers/college administrators. Anything from the masters - Buffett, Templeton, Graham, Ruane, Fisher, Trane ----g-- I will even drop so low as to mention O'Neill of momentum investing (Investor's Business Daily)? Apparently there's nothing to learn from the records or teachings or books of people who talk about value or growth or being concentrated-but-careful. Right back into WAVX they went trying to build up capital by short term swings. Maybe they learned about not having so much margin, about taking some gains when the gain taking is good. OTOH, maybe they believe if they could do it once - make a quick fortune in the stock market- they can do it again. Ah well, not only is it scary, it's sad. Paul, whose adrenalin flows when he reads such stories because he realizes he could be confronting his own demons