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

To: EnricoPalazzo who wrote (43896)	6/25/2001 5:41:20 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 54805

ardethan: Strange introduction >>It's good to know that you are able to accept the weaknesses of others, John<< I did not say weaknesses. I said felt unequipped. Which has been vocalized posted and affirmed numerous times in the sense of the word meaning not having tools to do the job. In your skepticism, you argue against those who would quest for such tools and point at evidence that they might exist. In which case only if you fail will you ever be equipped to attempt "Market Timing". Kind of pointless if you ask me, that you have to fail in order to succeed, or worse, that in succeeding you might fail. Me? I don't care so much if you succeed or fail. Provided that others on this thread are not prevented from learning and augmenting a great strategy with other mere crumbs of knowledge. Now, to continue the dialogue. Starting here >> I can think of many investors who have outperformed the market over the long term by buying great companies at reasonable valuations<< You mentioned "buying great companies at reasonable valuations". I totally agree. Which pre-supposes the ability to discern unreasonable valuations from reasonable ones. Which is all that I have been attempting to articulate. Because a sure way to under-perform the market is by buying at unreasonable valuations! So now, the great investors of whom you speak posess the ability to make this measurement. Let's take it a step further. What do you suppose they do once a stock held in their portfolio punctures the zone of "unreasonable" valuation? Hold it and hope that the definition of "unreasonable" changes? Hmmm... that holds many delicious implications, doesn't it. You seem to suggest that I somehow advocate purchase and sale of stocks based on speculative considerations (buy now because of what someone will pay, as opposed to what something is worth). No. Please let me be clear. There are two different decisons: (a) purchase, and (b) sale. I advocate the purchase of an equity when the expected returns from economic gains surpass my threshold. This decision is based on the worth and tempered by the price. I advocate the sale of an equity when the market price far exceeds the (same or revised) expected returns from economic gains. This decision is based on the price and tempered by the worth. Let me turn it around and you may see why. I think it's unwise to pay more for any share than I expect it will ever return in its lifetime. Would you? I think it's unwise to refuse someone's offer to pay me way more for a share than I think it will ever return in it's lifetime. Would you? And last, I think it is silly of me to believe that something is worth more than X$ when this statement is coming from the person or people doing the selling. If that was the case then that would make them a charity. I doubt it... don't you? John.