Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: kodiak_bull who wrote (22887)	3/12/2005 1:22:25 AM
From: whitepine	Read Replies (2) \| Respond to of 23153

Kb, First, as I originally noted, my perspective on Fundamentals is different. I also don't think that FA is a single methodology or formula. If it were, there would be broad consensus about many more questions/issues and one could just apply a mechanistic formula for a projected result. Fundamentals do offer promise. If a company increases earnings by 100%/yr, I would argue there would be strong pressures for the price of the stock to increase. Yes, other issues can skew the actual price action, but in the main, I make the case. Now, if earnings rise 10-20-50 or just 1%, the scale by which a stock's price will change is not linear. Still, are earnings/profits/revenue growth, etc., useful? Yes, I think so. I have trouble with your analogy with waves. I think I understand what you're saying as it relates to ST trades, but I don't think I can reply with contextual accuracy. Without ducking the issue, I will try. How do you determine if a wave is wave........or the first liter of a Tsunami? What methodological tool(s) helps one differentiate between wind, a reverse chop on the wave, a tide, a swell, an impending hurricane, or the wake of an ocean liner? How long can you ride a wave and how do you know? Take a look at these charts for 2-3-5 years: Peyto (Pey/un.to), Harvest (Hte/un.to), MSFT, FDG, STR, GLW, NT. How would one know when to buy/sell, if not by FA? Reason is not the perfect answer for the idiosyncratic behavior of the markets, but I prefer reasoned judgment to baying at the moon. For me, it is less about facts, and more about which facts at each separate timeframe. wp

To: kodiak_bull who wrote (22887)	3/12/2005 4:37:37 PM
From: CommanderCricket	Respond to of 23153

Fascinating and incitefull discussion. Bruce, your comment "So it all comes down to intuition and judgment?" is interesting and probably closer to reality than most suspect. Let's say you understand the FA of a company and/or industry and the TA confirms the tread you want to play. This get's you half way and reduces your risk. The final piece is gathering up the macro information and making an informed decision on whether to buy or sell and what risk versus reward is. This is where macro events can play havoc with any well informed investment strategy. 911?, Government proposing "windfall profit taxes, release of SPR? etc...all little bombs you can't possibly foresee. You've got to get all three right to be successful long term. Anything less and your gambling. I'll provide an example. I worked in the electronics industry for last 15 years and worked closely with many of the top companies all over the world. With this incite into the industry and access to top management teams I completely missed NSADAQ 5000! Every time I looked around and decided it was time to put money into a stock, I couldn't pull the trigger because "I knew these companies were overvalued". Where's the return on capital?, the cash flow? How could you invest in company who's only metric was cash burn per quarter? I worked for one of the more profitable companies out there and we weren't making our cost capital! I was eventually proven right but the opportunity cost was horrible. Perhaps the biggest error was not shorting when I saw it heading south. I had order cancellations in my hand from Cisco 3 months before the top and missed it! To summerize, I had the FA correct but didn't get the TA nor the desire of people wanting to own tech right. There's a lesson in there I'm still trying to get my arms around. Michael