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

To: paul_philp who wrote (47338)	10/1/2001 6:36:55 AM
From: que seria	Read Replies (1) \| Respond to of 54805

Further to UF's correct observation about market and sector moves, Moore's current remarks, and your comment: He started recommending 'market timing' with his infamous 'cash is the best asset class' almost a year ago when the Nasdaq was about 3500 I know what you mean, but it's revealing how that call could only be considered "infamous" from the very perspective now under debate--the "I don't time the market" model. Moore's call was a needed free edit to the GG, in time to do some good. Wish I'd listened better, but I had learned to "bargain" shop. If I hadn't gone partly over to the dark side early this year, I'd really be hurting. Once having recognized that market and sector valuation and trends can be just as significant to one's investing success as valuation and trends for individual stocks, I think it follows that LTB&H is one (extreme) form of market timing. It is the obverse of day-trading, but a decision not to sell is still a timing decision. Maybe the simplest and best, but that's the issue--not whether timing is being avoided. Here and in recent popular usage, "timing" is often used in a pejorative rather than literal sense. Objectively, it refers to when to buy or sell. There is no implicit judgment in the word that "timing" is short term rather than long term. If people wish to see a value judgment implicit in "timing," it must be because they recognize that timing matters. Most here (to me, correctly) see intended day trading as an undesirable approach. It is inherent in that judgment that longer holding periods are generally superior for investors with long enough to go to retirement. That does not tell us the duration of "longer." There may be a much more flexible holding period for stocks, consistent with GG principles, if market and sector risks are treated with even some of the attentiveness paid to individual stocks. Studies have repeatedly shown the primacy of sector selection, not stock selection, in producing investment returns. Since few can anticipate sector rotation well enough to be investors on that basis alone, diversification and market attentiveness are key. A corollary is that some, not all, of one's portfolio should be in GG stocks. I realize many using the GG do diversify. Moore could, without changing the LT focus of the GG, acknowledge that at some point of market valuation or sector fundamentals, a decision to hold stocks in a sector, or at all, calls for the sort of re-evaluation the book says to use for individual stockholdings. Others here have noted their use of alternatives to selling the equity, such as selling ITM covered calls to lock in profit, and buying equity or index puts based upon market or sector conditions.