Forum Archive Index - December 2001

["hugh webber" <hugh.webber@clear.net.nz>]

well I have to say I haven't read Mary's article yet (I read some of the later 
posts first and I
was wondering who "Mary" was - whether Mary Buffett had temporaily lost her 
marbles.
Now that I read the quote I think its a grave misinterpretation to say that 
Mary has gone over to
"technical analysis".
All she's doing is looking at past hard data illustrated as a graph - it could 
equally well be
columns of data showing the same thing.
The leaps of blind faith she doesn't make - all the mumbo jumbo of 'head and 
shoulders'  & graphs.
A simple illustration - its been warm in Chch the last 3 days. If I drew a 
graph I could then point
out that its trend line shows its going to get warmer but in fact a dirty great 
front swans in from
over the Tasman and we get a dose of snow.
Similarly for shares - maybe CAH shows a slowly improving shareprice so some 
people dive into it.
However the prices of competing products in plastic, concrete, steel, 
aluminium, and wood from
South America then cut it off at the knees and it collapses. 
But a value investor wouldn't have been exposed because they would have done 
their homework, read
Buffetology and realised that CAH is in a commodity market with competition 
nearly completely on
price and no or low barriers to entry. So they wouldn't have invested. Instead 
they would have cast
around for Buffett type stocks - Auckland Airport is the most obvious one - but 
there are
others....

----------
> From: Viewpoint . <viewpoint_@hotmail.com>
> To: sharechat@sharechat.co.nz
> Subject: [sharechat] Mary is into TA
> Date: Saturday, 1 December 2001 6:47
> 
> After the furore a few weeks ago I note that Mary Holm has taken up 
> technical analysis.
> 
> Obviously when it suits technical analysis is a powerful tool. Interesting 
> column of hers today in the Herald and again i think she has been sucked in 
> by what fund managers have convinced her.
> 
> Here is what she said -
> 
> I've got graphs of returns on US shares since 1845, and on UK shares since 
> 1869.
> 
> They wobble around a fair bit, but the trend lines are strongly upward. I 
> doubt if there's ever been a 10-year period when returns declined, let alone 
> a 14-year period.
> 
> And I don't see why a 150-year trend should change now.
> 
> 
> 
> 
> _________________________________________________________________
> Get your FREE download of MSN Explorer at http://explorer.msn.com/intl.asp
> 
> 
> ----------------------------------------------------------------------------
> To remove yourself from this list, please use the form at
> http://www.sharechat.co.nz/chat/forum/
> 

----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/