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.

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

To: Honest Abe who wrote (3417)	3/3/1998 10:20:00 AM
From: Ron Bower	Read Replies (2) \| Respond to of 79205

Abe, You said, "With investing, you have to pick the company and an entry. When the story changes, sell." My point exactly. An investor should buy in when a stock is undervalued and sell when overvalued. This can be an increase in price, a change in company situation, a change in sector situation, or various other reasons. An investor should not continue to hold a stock when the price is over the value of the company. The argument is how to determine that value. I find the market values most companies much higher than I do. Ron

To: Honest Abe who wrote (3417)	3/3/1998 12:56:00 PM
From: Scott Mc	Read Replies (1) \| Respond to of 79205

H.Abe, I've seen these stat's mentioned many many times by mutual funds who DON'T want people to try and time or take their money out if the market goes up or down, so they have a VESTED interest in pushing their point of view. I have never seen a study which says that IF you had been OUT of the market for the worst 10 days, the worst 50 days you would have made x%. I suspect that this nbr would be much larger since normally drops are larger than increases. Realistically no one can be out the worst 10 days or the best 10 days only, the logic these type of arguments satisfy (IMHO) is dont buy stocks buy an Index fund and never sell it. Scott

To: Honest Abe who wrote (3417)	3/3/1998 4:53:00 PM
From: Wayners	Respond to of 79205

<<But, with the thousands of mutual funds that operate as 'traders', why have none of them consistently outperformed?>> I can think of two major reasons. First of all the funds out there are dealing with a lot more capital than we are and they need to stay fully invested. They have a major problem with being able to play concentrated positions. By law they can't own more than 15% of a company. The second reason is liquidity. So if they do want to trade they can only trade really big companies that offer the proper liquidity to do that. The only problem with the big companies for trading is that those companies lack the volatility needed to get the short term large price moves to make money trading. There are some exceptions like INTC, CPQ, AMAT. But who wants to tell their clients that hey, look how much risk I'm taking as a fund manager. I have all your money in three companies. They don't have the balls. The good news is that me and you don't have to play by these restrictions. Really can't say that if the professionals can't do it then I certainley can't because they are the best that's out there. Not true. We have the advantage because we don't have to abide by the same rules. We have excellent liquidity in just about any company we trade and we can take concentrated positions. We can put 100% of our capital in a $3 stock if we want to. They can't.