To: jbe who wrote (34288 ) 4/10/1999 9:31:00 PM From: Chuzzlewit Read Replies (2) | Respond to
My dear Joan, I promise to no longer behave like an eel. I will be forthcoming. I have turned over a new leaf. I do not have my fingers (or paws crossed).growth investing . I love it. But growth investing is very risky. value investing . I hate it. Value investing can be about as exciting as watching paint dry. But sometimes you can get massacred here also. Dare I mention oil service stocks in December of 1997?Momentum investing . This is actually a form of timing, but it has some sufficiently different characteristics that I figured it should have its own name. Put your money in a stock because it went up a lot. Momentum investors believe that there is inertia to stock prices. Once a price starts to move, so they think, it will continue to move. They are fond of phrases like "Don't catch falling knives", and, "The trend is your friend". Since these people are unlikely to waste their time reading such mundane things as 10-Ks and 10-Qs, and indeed some of them don't even know what business their investment is in (true!), I have a hard time thinking of this as investing. Variants are investing in stocks just befor they split, etc.Trading . Now these folks believe that the market can be timed. They generate lots of fancy graphs (some of them are quite pretty and suitable for framing), they use computers to generate statistics (but don't subject their statistics to statistical analysis -- oh well!), and borrow liberally from statistics and probability theory argot. Unfortunately, the language is there, but the substance isn't. You can spot these guys because they will talk about MACD and double bottoms, head and shoulders and necklinbes. Some talk about dojis. Don't ask! It's basically dowsing with a 21st century veneer. IMO of course.
