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To: Skeeter Bug who wrote (36541)	10/15/2000 2:29:14 PM
From: X Y Zebra	Respond to of 64865

economics is a terrible predictor. it is a basis for judging actions as rational or irrational, though. Fair enough, however the key question to answer is: "when" does rational thought finally overcomes irrational actions ? There is a big difference between investing and speculating. It starts with one's objectives. One must answer some simple questions such as: 1. Ho much do I need as a return? (a specific figure to make, to win, to retire, etc.) 2. How am I going to get there ? (ideally, by closing positions at a profit, i.e. once the position is closed, the risk is terminated) Yes, taxes will be triggered but taxes are a known cost. Leaving paper profits exposed, is an "unknown risk". One must chose which one is best, (yes, there are times in which the answer will be different). 3. What is my time frame in which I should accomplish my pre-determined objective? and so on... Nothing lasts forever, yes I agree, stocks go up, and then come down... Do I have all the answers?... hell no ! I have been wrong plenty of times. So far,to my credit, I have been right more times than being wrong. (so says my brokerage statements). Is it easy ? = No. Is it time consuming ? = Yes. Have I found a "magic box" = No, my "system", (more like voodoo), sometimes it works, sometimes it does not. Most importantly, I believe that the only way to being... "more times right than wrong" is by developing one's own system. Each one of us is different from the next person and different things work for each one of us. I have found that taking profits from time to time, reduces the risk you were mentioning about the "perma-bulls", but I pay a price, since many times I leave lots of $$$$ on the table. Although I am trying to reduce such, I accept such situation in exchange for reducing the risk of being long in the extreme "breaks" such as the one we are experiencing. Another thing that has help me has been the strategy of selling covered calls. Without doubt in my mind, (particularly this year), these calls have provided a good % of the profits this year. So, bottom line, I really do not care if I am in the side of the bulls or the bears. In the end, I am concerned with being in the profitable side. I have made a million mistakes and I have found a "process" (or call it a system, --in fact I don't care if you call it peter or mary--), for now it seems to work. I do have to pay attention to it constantly, and above all, I have learned that I can be very wrong, and I change my opinion accordingly. I have to, otherwise, I will end up in the "unprofitable side" regardless if it is a "bull market" a "bear market" or a "pig market" for that matter. the end of this bubble will not be pretty. It never has, it never is, and it never will be. But frankly, I have no idea when this "end" will be. The best I can do is attempt to be in the profitable side and be on that side, more time than not. The day that such proverbial end arrives, if I still have my capital to trade another day, then I know my system is working. If not... well, I'll see you at the soup kitchen. --But I intend to be serving it, not consuming it -g-

To: Skeeter Bug who wrote (36541)	10/15/2000 2:58:03 PM
From: X Y Zebra	Read Replies (3) \| Respond to of 64865

anyway, when the naz dipped from 5k to 3.5k earlier this year, the person i knew lost nearly $400k and locked in the loss b/c he had to sell positions. a BIG, BIG winner either lost it all or turned into a net loser - i don't know which. i hope he didn't lose as much as he made. More than being "wrong" in his/her stance (i.e. bull or bear), this example tells me that the person you are talking about has no "structured system" (even if it is voodoo). Obviously I am merely expressing an opinion based on what you are telling me only, but I am trying to express how important is to establish a structure, a system, before going off on a wild hunt in the Wall Street jungle. Was the $400 K a net loss ? or was it a former profit that vanished ? My point being... Please consider, I have no idea of the portfolio size, but if I have a paper profit of 400K, if such is the case, (and I insist in not taking a dime in profits), I think I deserve to be hit as you described. Unless my speculation is for even larger figures. [and obviously, I am capable of affording it]. But under "normal" (whatever that may mean), circumstances, I think that at least taking some profits seemed logical to me. Then again, it takes all sorts. It gives me the impression in this case, profits should have been taken. No longer will I consider anything... too unusual, or too uncommon. Nothing surprises me any more, we humans are capable of all sorts of extremes. The good, the bad and the ugly is not only a movie. It is human nature. p.s. Just read the LU thread... it is sad, ugly, and even funny at times, but... no one was pointing a gun at anybody, all trades were "fair trades". I was heavily invested in LU (I loved the premiums when volatility allowed). Then I started looking for greener pastures when the premiums became thiner. I got "called away" about 10 months ago or so... (I do not remember exactly). Never re-established the position. Please ask me : Are you glad you were out of Lu ? I shall say... Lady Lucy became Lucretia McEvil, before I date her again, she needs to visit the shrink ! And "SHRINK" she has !! perhaps it is time again... I do not rally know, but I am looking closer.