Forum Archive Index - September 2000

[Mike Hudson <MHudson@placemakers.co.nz>]

Snoopy wrote

"But if you are an investor you are raking in the dividends while you wait.
I would hardly call holding something like RBD and getting paid 12% just to
sit on your own money a 'losing' position."

It's a losing position if you paid $2.20 for the shares in which case you
are only making 6% or so on your original investment - less than you can get
in the bank. If you assess the return at 12% either you bought at the
current level OR you have written off the $1 or so the share price has
fallen since the float. You can't have it both ways.

This is a very interesting debate. Coming from the "scientific" school I
account for a loss as soon as it occurs i.e. when the market says a share is
less than I paid for it. I bought RMG (for the wrong reasons) at 36c and
sold for 33c; that is a loss. They are now worth 31c which to me would have
been a bigger loss.

Anyway how many of us count our profits before they are realised, so what's
the difference with losses?

To misquote Gertrude Stein (or was it Dorothy Parker) "A lose is a lose is a
lose"

Cheers
Mike H




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