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To: Stan who wrote (791)	8/25/2000 10:52:33 PM
From: LPS5	Read Replies (3) \| Respond to of 1426

[A] portfolio is the only asset I know of that is uninsured. Actually, "portfolio insurance" did exist, and still does in some forms, though scarcely by that name. It was widely blamed (legitimately or not) as an aggrevating factor during the October 1987 stock market crash. This was/is, of course, not insurance in the sense of policies, premiums, and actuarial determinations, but rather a form of financial engineering involving concepts borrowed from physics and economics. At that time, portfolio insurance was pioneered by a firm called LOR and provided to pension funds, money managers, college endowments, and other institutional entities. Interestingly, several of the main theories underlying LOR's portfolio insurance trades (Black-Scholes, etc.) were the academic product of several individuals who, roughly ten years later, were principals of the now-defunct hedge fund Long Term Capital Management. LPS5

To: Stan who wrote (791)	9/7/2000 11:42:30 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 1426

Stan, And, being long-term, I don't have well developed exit strategies yet. I am also a long term, buy-and-hold investor as opposed to being a trader. Developing exit strategies is rather simple. When you first buy a stock, any stock, take a 3x5 card and write on that card the reason(s) you bought the stock. Periodically (after each quarterly report is good), review the company's numbers. Review your reasons for buying the stock. If things have changed (a nice way of saying that the fundamentals are no longer as encouraging as they once were), then it may be time to consider selling the stock. Generally speaking, you're looking for the onset of a long term downward trend as opposed to merely one or two consecutive bad quarters. As a rule-of-thumb, a single bad quarter is to be expected; two in a row is acceptable but worrisome, and three or more (consecutive) bad quarters defines the beginning of a trend. At some point, you define your "pain" threshold for the stock, place a stop loss and don't look back once you've sold (lest a bad case of seller's remorse sets in). And don't set the stop loss point too high, or you could end up out of the stock on just normal volatility. Of course, this is only a general guideline. Each stock is unique, and your reasons for selling are unique. This is as it should be. If investing were simply a matter of developing formulas and applying them, then anyone with a half decent education would become rich by playing the markets. We all know that this isn't true. Market conditions and circumstances are constantly in ebb and flow; and therefore, your investment strategies should match the tide of the market and change when necessary. Hope this helps somewhat. KJC