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

To: OZ who wrote (47274)	9/29/2001 5:38:06 PM
From: RobertHChaney	Read Replies (1) \| Respond to of 54805

OZ - thanks for the excellent responses. IMHO, the market is eventually wrong when it goes through a period of sustained drive in one direction, either up or down. This ultimately tends to lead to the phenomenon of momentum begetting momentum. During which, many powerful forces line up and sustain it. And eventually, everyone who is going to get in on the boom or get out of the bust, does so ("last man theory"). And the final, and by far most important element is that the momentum carries the market or industry well beyond historical bands of valuation. At that point the market has reached high levels of irrationality (it is wrong) and merits a big fundamental move (sell out at the top or buy in at the bottom). I know you can still make money in trading by buying at historically high levels or selling short at historically low levels, but IMO that is like "picking up nickles in front of a steamroller." You posed the question about why buying in a bear market should be considered market timing. I think it depends on the primary reasoning behind the purchase. If valuation in historical terms is not one of the primary driving factors, I would subscribe that it is probably market timing (of course, there is nothing wrong with that if stock trading is your core strength). On the other hand, if the investment is a great company run by great people, trading at valuation levels seen in similar recessionary times (like the early 1980's or 1990's) for similar companies, that would appear to be sound fundamental investing. But, JHMO. Also, for what its worth, in post #47279 I gave my thoughts as to how deeply I think the current market is really discounting a "bear market". Robert