Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Nuvo Research Inc -- Ignore unavailable to you. Want to Upgrade?

To: Cal Gary who wrote (6030)	12/3/2000 7:42:54 AM
From: Tom Drolet	Respond to of 14101

Cal: Just enjoyed this opinion this am. Tom D. Good stocks, wrong time produce bad investors Bill Carrigan BUSINESS COLUMNIST --Toronto Star--Sunday 3 rd Dec 2000 Getting Technical An experienced trader I know once told me there are no such things as good or bad investments, only good and bad investors. He was referring to investors who make bad investment decisions because of inexperience or the failure to recognize their risk-tolerance level. A bad investor may buy a falling stock because it seems to be cheap, worry when it continues to fall and panic and sell about the time it hits bottom. I had this in mind at a recent technical-analysis seminar when I asked about 50 people when the last bear market occurred in North American stock markets. Fewer than one-third of the group remembered or knew about the October, 1998, Asian currency crisis. Only three out of the attendees remembered or knew about the October, 1987, stock market crash. None knew that the Toronto Stock Exchange 300 composite index did not rise above the 1987 peak until the first quarter of 1995. I had identified a group of adult investors who had never experienced a bear market in stocks. Most of them were owners of technology stocks but they had failed to recognize the current technology bear and they lacked the experience to take appropriate steps to protect their capital. My friend was right: They were bad investors who owned good investments at the wrong time. Most experienced investors recognized the technology spike of last March and April as a bullish stampede that could signal a impending bear market in the sector. The crash that followed may have been just another correction in the group. A bear market would only be confirmed if in a subsequent rally, in this case our summer rally, the group failed to advance above the March-April peak and make another new high. The summer technology rally fizzled and by Labour Day no new yearly highs occurred in the group; many fell below their May-June crash lows. A bear market in the technology sector was a reality. The summer rally had provided two opportunities: Investors could either sell the group and sit on cash or sell short and profit from another drop. As the bear market in technology stocks drags on, the short sellers and the investors on the sidelines will look for an opportunity to buy back in. Our task now is to try to identify downside targets. I have found that moving averages and trend lines are effective forecasting tools. This week, I am using two trend lines on a monthly chart of the TSE 300 composite index in an effort to forecast some downside targets for the technologyweighted TSE 300. Note the long-term 1982-2000 trend line ``B'' on our chart. I need this trend line for long-term forecasting. Note that the trend line is rising and in about two years it will be at about 8,000. Note the shorter 1998-2000 trend line ``A.'' It illustrates the current two-year bull market in the TSE 300 that originated in the October, 1998, low of the long-term trend line. The peak in early 2000 represents almost a doubling in the TSE 300 composite index thanks to hot technology stocks. The recent technology crash has brought the TSE 300 down to rest on the short trend line. That occurred last Thursday at around the 8,800 level. I suspect a short rally in the deeply oversold technology stocks to once again lift the TSE 300 up from the shorter trend line. Traders could enjoy this rally. A new wave of selling early next year should drive the TSE down through the short trend line. The TSE 300 could then spend the rest of the year working lower to our long-term trend line. Relax and enjoy it. In a bull market, be an investor - in a bear market, be a trader.

To: Cal Gary who wrote (6030)	12/3/2000 2:46:59 PM
From: David Graham	Read Replies (1) \| Respond to of 14101

Penison funds, generally, do not buy companies. In fact, they are prevented by law from owning more than 30% of the voting shares in most companies (exceptions include real estate and resource firms). More importantly, the press often misleads people when they talk about pension funds as investors, implying they are active investors. The overwhelming majority of pension funds do not manage their own investments. They hire money managers (the McLean Buddens, Phillips, Hager & Norths, and Jarislowsky Frasers of this world) to manage their money. These investment managers never buy control of companies. The funds that do manage their own investments are huge ones like Teachers and OMERS in Ontario, or the Caisse in Quebec. They are the exception, not the rule. And, even these guys farm out much of their money to external managers. The only recent instance I can think of when a pension fund bought a company was this year when Teachers bought a property company (I can't remember which one). So there are no pension funds lining up a takeover of DMX. All the better for us, really. I'd rather make a huge killing over a few years than a small bump now.