Forum Archive Index - May 2001

["Tony" <tony@ltdrisk.com>]

Thanks Snoopy, you've said much of what I felt myself...lots of hard work.



-----Original Message-----
From: owner-sharechat@sharechat.co.nz
[mailto:owner-sharechat@sharechat.co.nz]On Behalf Of
tennyson@caverock.net.nz
Sent: Monday, 28 May 2001 11:00
To: sharechat@sharechat.co.nz
Subject: Re: [sharechat] Experience and judgement



Hi Tony,

>
>I'm new to this chat and would like to know how to
>analyze/"do our studies" properly. I have a fair idea of
>what it entails from text books but what do you guys do?
>Where do you get your data from? Annual reports?
>


I don't think that I have ever bought a company where I haven't seen
an annual report, or at least a prospectus.    Often a comparison
between 'back to back' annual reports can be illuminating.  You read
the hyped outlook from the previous year and compare that to what
actually happened.  Useful for highlighting the weak points of
management and give you an idea as to how to 'filter' their current
comments as they relate the the future outlook.   Where possible
check out the annual reports of the competitors of the company you
are thinking of investing in too.   That can often be more
illuminating than looking at the company's own reports!


>
>elsewhere? Or do you build your own models? I'm
>referring to fundamentals rather than charts, or do you
>use both?
>


I sometimes use a very crude form of charting when buying and
selling.  I look at where the resistance points seem to be so that
my buy/sell instructions are at least realistic.  I always like to
get those few extra cents per share on the sell price too.   But
probably over the long term it doesn't make much difference.


>
>I wonder how this all works for each of you...you do the
>numbers, check with the other brains and then trade...?
>


For every trade there is a buyer and a seller, so obviously *all*
the 'brains' are never going to agree.  That is what makes a
market!  I am not saying that either the buyer or the seller is wrong
either, in any particular trade.  Different time horizons,
rebalancing issues and different investment philosophies can mean
both the buyer and the seller made the right decision - for them.

Sometimes I make investment decisions, and set buy /sell
price targets weeks in advance.   Then I  stick to them no matter
what the ebb and flow of the market is on the particular day I
actually buy or sell.  I think that, at times, you can be too close
to the market and let some day trading issue cloud your longer term
investment vision.

>
>Does the market move BECAUSE of your recommendations
>before you trade? Or do you trade before you air your
>views?
>


I seriously doubt that any share of significant standing can be
moved by anything said on this forum by one person.  I have had rogue
e-mails (not anything to do with this forum) talking about obscure
stocks on the NASDAQ, purporting to be 'hot tips'.  If a share is
not often traded you might be able to influence the market if enough
gullible people believe your tip.  Myself, I send these 'hot
tips' straight to 'Spamcop'.


>
>I have to think that you don't give out all your tips
>for free and wonder why, if you do?
>

Ah,  I see you are cynical too!   An excellent quality for an
investor to have, if I might say so.   I guess my philosophy is the
more information shared about the more I am likely to get back in the
long run too.  And investing, unlike trading, is not a zero sum game.
Which is to say that if I win, we can all be winners.

Finally with any post of substance I tend to disclose my interest,
which should give readers some idea of where the bias is likely to
be.  Hope that answers your questions.  But there is no short
cut to doing your own homework.  Would you base all your
investment decisions based on what some dog says on the
internet? SNOOPY






---------------------------------
Message sent by Snoopy
e-mail  tennyson@caverock.net.nz
on Pegasus Mail version 2.55
----------------------------------
"Dogs have big tongues, so you can bet they don't
bite them by accident"


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