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

To: Steve168 who wrote (19158)	4/30/2004 10:25:32 AM
From: Steve168	Respond to of 78858

A sell-off is underway ... The model reached "critical level" the day after Microsoft released earning report. It held well and clearly told me that was the technical top. Now we are confirmed on the downtrend, however there could be rallies and my model will continue to detect the strength of those, it will give me signal way before any significant reversal of the big downtrend. Shorting stocks is the most difficult task in stock market and has unlimited risk. I am still practicing the skills and far from mastering it. It is not for people who don't manage investment full time, and not for most of the people who do investing fulltime. However it is the best way to achieve long-term outstanding results since we will be in a trading range in the next decade or two. The 25-50% move we saw last year will be typical every 2-3 years, both on upside and downside. That's why people entrust money to those great hedge fund managers. I am planning to write up my lessons learned in the past 5 years shorting stocks. Good Luck in this tough year 2004! Steve

To: Steve168 who wrote (19158)	4/30/2004 7:15:30 PM
From: MCsweet	Read Replies (1) \| Respond to of 78858

Steve168, Just my opinion, but your model and your approach are too risky for my appetite. I know that at some point you said you were looking for investors --- I would be very careful applying this approach to other people's money. You are buying and shorting extremely volatile stocks based on very short term factors. Mechanized technical models are quite risky if used by themselves on volatile stocks, and markets can change such that a mechanized model that has worked well for years may no longer work in the future. Stocks may be overvalued right now, but the basic value approach has proven time and time again to work. Black box approaches to investing have proven time and time again to blow up. Your market calls seem to have been basically right so far aside from a glitch or two (for example, your model was short term bullish on Feb 5 and the market dropped from there), so maybe you will prove me wrong. I actually tend to agree with you that tech stocks are overvalued (I thought they were when you were still touting ALVR), but I am not going to short them --- I like to sleep well at night, and I can do that with value investing. Not trying to discourage you, just trying to provide a word of advice ... MC PS: In addition to my personal value investing, I work separately for a hedge fund. We short stocks, but would never take naked short positions like you are considering, trying to predict the market.