Forum Archive Index - August 2000

["Peter Maiden" <pmaiden@today.com.au>]

Traditional investing techniques to a certain extent now seem outmoded. I have 
started applying a "trashed stock policy' which defies all basic fundamentals 
but for traders seems to work.

Based on the current principle that rumours and speculattion  are quickly taken 
on board and prices are driven up to unrealistic levels but when expectations 
are not met the correction is decisive and painful(for those on the bandwagon). 
The correction in a lot of cases takes the price down to lower levels than 
before the rises. That is the time to buy - with the intent of selling when the 
price gets back to near the original level.

Recent wins ( I hope)

RBD a few weeks ago were at $1.10 - $1.12. In spite of sales announcement 
reporting another quarterly sales growth and that Starbucks were starting to 
work the stock was 'trashed' to a low of $1.00. Nothing seems to excite the 
market about RBD anyway. Managed to buy ay $1.01 with intent of selling at 
$1.12 - nearly there. Got a good divident bearing stock (by default) if theory  
doesn't work.

FLB trashed the other day. Had gone from $2.35ish to $2.45ish on takeover 
rumours and all that. Trashed to below $2.20. Got some at $2,21 with intent 
selling at $2.35. FLB is one stock I said I would never touch because some 
divisions of FLB must be the worst managed operations in NZ and they have only 
survived because of Fletchers sufference (thats another story). Getting there 
again -quicker than I thought.

Today I'll buy some Orica (ORI) share on ASX which have been trashed from 
A$7.40 to A$6.30 in the last 2 days on a less than expected profit 
announcement. Still a blue chip (albeit an out of favour industrial) which does 
make money with a lowish PE of 9 and plenty of money in the bank. Intent - sell 
at $7.20 ( about 15% gain) and wait for the next trashing. 

For one whose short term trading has been limited (usually in for longer 
periods) the tempations that currently are happening are too great to resist.

Any other views?


Peter

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