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

To: Percival 917 who wrote (34610)	11/12/2000 9:23:51 PM
From: DaYooper	Read Replies (2) \| Respond to of 54805

Hi Joel, Know that the dramatic re-valuation of your portfolio is not individual but across the board. We all have felt much pain this year - and even that is an understatement for many of us that either leveraged our accounts or tilted too heavily in one stock or one sector. There is some relief knowing that misery has company in this case. Here's my philosophy for dealing with volatility. Being LTB&H, I expect that qcom, intc, and csco will have an approximately correct market value in five or seven years based on each company's revenue and profits at that time. Today I feel confident in each company's fundamentals, their G or K genetics, and their management. If any of that changes I may decide to reallocate my investments. Otherwise I will hold for that time realizing there will be huge valuation swings based on external forces - too numerous to mention. In other words, their stock prices will swing wildly up and down but in the end will digress back to the mean - or in this case to the approximately correct valuation. Realizing this I try not to get too excited when a price spikes or too bothered when a price crashes. In reality, these swings will not affect the company's true "long term" valuation. Until I became internet connected, I never checked on my account values (although I easily could have by phone). My point is that I think the net can put us too close to our investments and encourage day to day observing and re-thinking of strategy. Luckily I started years ago before this phenomenon. I think today it's much harder for a young person to enter the self-directed investment world with the true LTB&H strategy. Merlin posted about a year ago the importance he placed on having "years" of living expenses in cash (at retirement) to allow him to sleep well at night and ride thru these fluctuations. At that time many could not relate to this conservative philosophy. Now it's more easily understood. In short understand your investments, have confidence in their long term strengths if they are deserving, back away from following their day to day valuations, and be sure you have enough cash (in saving or paychecks) to live comfortably without tapping your investments for years. G&K fundamentals combined with years of time invested will treat you well. Rory