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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (10644)	2/5/1998 3:12:00 AM
From: RGinPG	Read Replies (2) \| Respond to of 95453

And certainly none of it is predicted or predictable by trying to figure out the politics of the Middle East. But, I must say that your points on the virtues of long term investing are well taken. Long term investing is just so painful sometimes, that trading for a shorter term with a small portion of my stocks does seem to ease the pain of my portfolio nonsensically falling 40% in 2 months. But I do believe that in order to make money in the market, you only have to understand what is happening now. TA helps me do that.

To: Chuzzlewit who wrote (10644)	2/5/1998 7:23:00 AM
From: Thean	Read Replies (1) \| Respond to of 95453

<TA discussion> Paul, I understand your position on the predictive power of TA very well. Your argument against the validity of TA using the BB and MACD is technically correct. However, it is not to say that TA is useless when practiced by a skill artisan. Here is what you said: Just consider this: statistically valid trends can be drawn if you specify the starting and ending points, but no future statistical inferences are mathematically possible, so it is impossible to generate a standard error for the prediction, but that is exactly what a Bollinger band is supposed to be! The same is true of MACD. These are surrogates for the first and second order derivatives of the underlying function and are used to detect inflection points in the curve, but since the function is mathematically undefinable none of this makes any sense. Technicall correct. The key is your argument on the undefinable beginning and end points of the period under scrutiny. Put it another way, the box is not defined therefore any meaningful mathematical functions written to define higher intelligence is undoable. Ah, what you did not say is that most TA indicators incorporate the concept of moving average. Sure, tomorrow's endpoint is yet to be determined but based on the actual data collected since 5,10, 15, 200 days ago, the one missing endpoint may become very non-significant in the grand scheme of things. Now, most TA indicators even attempt to define the uncertainty of that one last point on the chart by projecting an error bar for it. Net, in the skill eyes, that last point has a statistic place on the chart. Putting that in practice, I would have statistically intelligent assessment of the risk/reward of what that price point is going to be the next day. So far I'm talking about that "one day" point. People have also done the same for that "one week" points but obviously the the statistical error should be greater because now less data are available and more projection we are taking. Now for the record. I have been in this sector since 1996. I have a long track record of beating the odd on the sector buying and selling. My net gain in 1997 on all my drillers trades are significantly higher as a result of trading using TA as the primary guidance. This is a fact (my fact). If I were to just buy and hold, I would have taken a larger risk by subjecting myself more to the two significant dips (early 97 and since Nov). I was out in the early 97 period and almost one month in Nov 97 as a result of TA guidance. Sure I bought in too soon (which proves TA is not foolproof) but I did beat the odd by a large margin as a result just based on these two periods. Good TA practitioners will also focus on the nature of the market under which TA operates best. My personal experience is it works best when the long term trend exist but there are many small short term cycles. If you look back on a 18 months chart you will notice how many small cycles there were. In most case these small cycles were detectable by TA. Those who can read it can take have the confidence to time the cycle and again beat the odd. No one can say I'm not a long term investor because I'm in this sector since 96. The tax consequence of frequent trading is real as you pointed out. It is a matter of decision and timing. For those who bought near the high in Oct and held on till today, just ask them if they regret not taking a small loss in Nov and preserve cash instead? Tax is inconsequential when there is a three months of severe bear phase.

To: Chuzzlewit who wrote (10644)	2/5/1998 12:14:00 PM
From: diana g	Read Replies (2) \| Respond to of 95453

Re: TA --does it work? Paul, May I offer an analogy? If a highly respected and widely read analyst intended to recommend ABC Co., but his finger slipped on the keyboard and he recommended ABV Co., what would happen? ABV would move up. My point is that TA is considered by many in making their investment decisions. It therefore becomes a sort of self-fulfilling prophesy, to a limited extent. The opinion of analysts doesn't need to be accurate/well thought out to move the market. Prices move up/down for many reasons, lots of them irrational. I think of TA as an influential analyst----he may not have a clue, but lots of people listen to him, so I'd better hear what he's saying and take into account his affect on the market when making my decisions. just MVHO best regards, diana