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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Bruce Brown who wrote (65132)	12/23/2000 9:12:54 PM
From: KymarFye	Read Replies (2) \| Respond to of 99985

A thoughtful and well-supported argument, with, so far as I can see it, at least one major flaw: "That's the way I've played the game for the past two decades and most likely will be the way I play the game for the next two decades." If the market and the world cooperate, your way of "playing the game" may work just as well looking out to 2020 as it has from 1980 to 2000. If 2000 to 2020 are an average couple of decades, then the style may, at least, give returns well in excess of other investment approaches (or trading styles), but will remain unlikely to duplicate or even come close to duplicating the returns generated by timely investment in leading growth stocks during an extraordinary period such as the one in question. If 2000 to 2020 are below average, it might be very difficult or unlikely to get very far simply by holding onto stocks, even the gorillas, as the inevitable losses/errors in judgment which are easily overcome during a bull market tend to extend and multiply during such periods. If 2000 to 2020 are well below average or worse - a great regression to the mean following the great secular bull market - then you might wish you had tried almost any other approach. Especially in the bad and worst case scenarios, and depending on the extent and degree of whatever economic and/or market setbacks, compounded returns can also turn into a kind of reverse-compounding - when the exigencies of a bad situation force investors to liquidate their holdings at the worst possible moments (maximal devaluation). I think the grand strategy you describe is at least worth keeping in mind, and perhaps employing alongside other strategies, but I just wonder if, under the right wrong circumstances, and especially for newer, less experienced investors, it might not turn into the classic mistake of fighting the next war with the tactics that were successful in the last one.