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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Madharry who wrote (13511)	12/30/2001 1:30:47 PM
From: Paul Senior	Respond to of 78537

Hi Madharry. I see three components: Recognizing that it's time to consider making a decision about a stock one owns. Choosing the decision to be made. The choices being: add more (when stock is down), sell some at loss, sell out completely, or do nothing. Or if the stock is up- add some or sell some or sell all. Or do nothing Having the will & resources to take action. I believe that investors can improve the recognition aspect by being alert. For me, the recognition cues come almost randomly from external sources. Three examples are: One notices that insiders are buying or insiders are selling one's stock. Articles in the media. For example, if one reads that Marty Whitman or another value investor one respects is starting a position or re-affirming his confidence in a downtrodden stock that one already owns. From people on this thread. People who one day say they're getting into or they're getting out of a particular stock that one already owns. That’s a clue. Or if the stock is discussed and yet there’s no positive response from posters, that could be a sign that value investors don’t see the value to the stock. In these cases there's an assist not only in bringing about an awareness that a decision might be appropriate, but also what that decision might be (buy or sell). In general, my opinion is that everyone (except Buffett, Munger, and maybe(?) one person on this thread) has losses. Losses cannot be avoided, and so they must be expected. In other words, there will be mistakes made in the "choosing" decision – mistakes that can't be corrected. Imo, that's a reason for having a well-diversified portfolio – I believe diversity is important in mitigating disasters that occur with a few stocks. Sometimes the correction decision is to wait for the turnaround. At some point, if it doesn't happen, then the stock has to be sold. Dr. Graham picked 2 years for net-nets. So I arbitrarily decided to capture a tax offset by selling some stocks that I owned about 2 years where I still didn't see the recovery. (As regards LDP in particular, I otherwise find it attractive here, and will likely add back to my position in 31 days if the stock remains below 5.) Perhaps ’02 will be a good year for stocks, especially value stocks. I am hopeful! Paul S.