Forum Archive Index - February 2002

["Malcolm Cameron" <malharcameron@hotmail.com>]

To all TA people what would happen if we were all TA people the market would 
die. Everybody would look at there graphs and say thats going sideways or 
down and would not buy. Without Fundamentalists or yield buyers. There would 
be nobody to change the trend to give a buy signal. Or would some smart ta 
person buy a few shares knowing he was on to a fortune as everbody would 
follow him because the graph said that one share was in an uptrend. Taking 
one Phaedrus's example PFI that looks like it is in a bit of an uptrend. But 
since managements change to AMP its dividend in actual money is in a 
downtrend & on a yield basis a very significant downtrend so unless we 
compare gross yields from an individuals purchase price we are not comparing 
Apples with Apples.
Disclosue Hold both PFI & TWR
Malcolm

>From: Phaedrus <Phaedrus@techemail.com>
>Reply-To: sharechat@sharechat.co.nz
>To: Sharechat@sharechat.co.nz
>Subject: [sharechat] Spot the Dog
>Date: Tue, 26 Feb 2002 16:11:23 -0800 (PST)
>
>My responses to Ichi's post, marked by # :-
>
> > (1) Buying and holding stocks that are in longterm uptrends is a 
>successful investment strategy.
>
>Sure.  You tell me which stocks will maintain a longterm uptrend
>for the next five years and I will be happy to buy them.
>
># I can't. But I can tell you which ones are currently in longterm 
>uptrends.
>
> > (2) Longterm uptrends can last for many years.
>
>Sure.  And longterm uptrends can terminate abruptly.
>
># At which point you sell. The strategy is to only hold stocks that are in 
>longterm uptrends - not to buy and hold regardless. All trends end sooner 
>or later.
>
> > Would you not do better patiently holding stocks that are
> > steadily rising, rather than those that are going nowhere?
>
>Sure.  You tell me which stocks will steadily rise for the next
>five years, and I will be happy to buy them.
>
># I can't. But I can tell you which stocks are rising steadily at the 
>moment. I can also tell you which stocks are currently going nowhere. And 
>which stocks are falling. Your choice.
>
> > Buying static or falling stocks in the hope that something
> > good might happen further down the track sounds to me like
> > ..... speculation!
>
>Sure.  And buying rising stocks in the hope that they will
>keep rising is also... speculation!
>
># At the very least, one course of action is much more speculative than the 
>other. One is buying in the expectation that what has been happening for 
>some time will continue to happen. The other is hoping for something that 
>has never happened before in the history of the stock. One is hoping that 
>nothing unusual will happen, the other is hoping for exactly that. Very 
>different cases.
>
>IMHO it is unwise for an investor to base his expectations
>of a stock's future performance on its past performance.
>
># Ichi, every known method of forecasting, from weather prediction to 
>fundamental analysis, is based completely on past data. What other sort is 
>there? As one statistical text puts it "The first step in forecasting the 
>business or economic future consists of gathering observations from the 
>past" (Freund and Williams)
>  The field of statistics makes a distinction between Descriptive 
>Statistics and Inductive Statistics. Descriptive Statistics refers to the 
>graphical presentation of data such as a price chart. Inductive Statistics 
>refers to generalizations, predictions or extrapolations that are inferred 
>from that data. Chart analysis is just another form of Time Series 
>Analysis, based on the study of the past. The use of past data in an 
>attempt to predict the future is grounded in sound statistical concepts. 
>Anyone questioning this would also have to question the validity of every 
>other form of forecasting based on historical data, which includes all 
>economic and fundamental analysis.
>
>                  Phaedrus.
>
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M H & M M Cameron
55 Czarnecki Street
Camira 4300
Brisbane
Queensland
07 3389 0515


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