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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: KevinThompson who wrote (49293)	3/17/2001 10:31:43 AM
From: tennessee_ted	Read Replies (1) \| Respond to of 57584

Kevin- I must strongly disagree. Your post could have been made every month for the last six months. Indeed, I have argued with my landlord of 20 years, who, in Oct 99 put all his savings ($150K) into QQQ and First Hand Funds and rode it up to $130K profit. However he has ridden it down as well(now -$62K). He is a "long term investor" not a "trader" like me. Well, I may be the crown prince of bad timing, but I still have 2/3 of my profits from starting at the same time from scratch. I actually really pissed him off a couple of weeks ago when I again approached him about damage control. This Friday morning, he looked at the naz on CNBC with me and looked and sounded worried. He's lost 40% of his principal now. I have owned so many losers and rode them down (remember Planet RX, etc.?) past where I should have cut my losses, believing in their stories, that I really should have absolutely learned the lesson of capital preservation by now, but I still screw up, and maybe will just have to stop trading since I may not have the discipline, but that's another story. The overall market and our economy has it's story, and most everyone has believed in it all the way down to here. What people are finally waking up to is that each new low may NOT be the bottom. They are starting to wish they'd sold at least part while the getting was good, cause now they're in the hole and its getting deeper and the walls are starting to cave in. Your opinion assumes we're at or close to the bottom. There is no evidence at all that I can really hang MY hat on that this is the case. I've lost most of my lost profits this year following that rationale and going long when the trend was and still is clearly down. I am now essentially all cash. How about you? I think the right strategy for even a long term investor is to limit their losses while they can and wait for clear evidence that we've turned up again. It might take a couple of months. You might miss some of the recovery move back up, but you might also miss more move down. A long term investor shouldn't be looking at hourly charts or maybe even daily. A couple of months on the sidelines is a short period of time for the people whose actions you were critical of. If you look at a weekly chart of the naz, it looks like a ski slope without the bottom in sight yet. Why wait longer- if today is the actual bottom, it will be blind luck to catch it. I think we have to go down more and the recovery may not be rapid or soon- we just have to see. In the meantime, the folks with their life savings cut to shreds are wise to move to the sidelines, they should have done it sooner. A good rule might be, anytime you lose 15-20% from where you were, get out and wait a while, at least until the direction is clearly up again. The market determines prices only by balancing fear and greed. Right now fear is beginning to gain the upper hand and it is entirely possible that the chit hasn't hit the fan yet! As always, this rant is only my opinion, and everyone knows I'm a pessimist at the best of times. -Ted