Forum Archive Index - April 2002

[Phaedrus <Phaedrus@techemail.com>]

Snoopy,
       You have made some astonishing statements that I would like to refute :-

<<<< "... if you have a share that steadily increases in value over 
many years, with very little oscillation about an upward share price 
line that keeps going up you would be a fool to trade it. You will 
be worse off if you trade it short term.  You will be worse off if 
you trade it medium term and you will be worse off if you trade it 
long term.  This is the case with RBD." >>>>>
 A steady increase in value? You must be joking. RBD is still below its issue 
price, almost 5 years after listing. Very little oscillation about an upward 
share price line that keeps going up? Huh? Not on my chart. 

<<< "The market doesn't get too many surprises and consequently 
share price volatility is low." >>>  
Low!!!! This stock dropped from $2.65 to 64 cents in just over a year!! Since 
then it has more than tripled its value in just over three years! I'd hate to 
see a stock that you claimed had high volatility!

<<<< "Why would you trade RBD when there are far more volatile shares about 
that you can do far better with (if you are a trader)"? >>>>
Because it has acceptable fundamentals, good volume, good clear trends and good 
volatility.

 Snoopy, as an advocate of the rewards of buying stocks on their fundamentals, 
and then holding them regardless, you could hardly have chosen a worse example 
than RBD. It has been a high risk, poor return longterm investment, at one 
stage losing about 70% of its value.

 Many longterm investors that eschew TA generally, make use of one particular 
tool - a 200 day moving average. This is plotted on the chart below. Note how 
it keeps you out of long downtrends, keeps you in long uptrends, and only gave 
3 trades in five years. 3 trades that would have turned $10,000 into $24,000. 
"You will be worse off if you trade it long term. This is the case with RBD." 
Wrong! Look at the numbers - see where buying and holding got you. Yes, I know, 
I have ignored dividends and the 1:12 bonus issue in March 2000, but it is 
still no contest. TA need not be complicated, or lead to overtrading. The 
attached chart shows just how simple it can be. The use of slightly more 
sophisticated trend indicators gives results that are far superior to those 
quoted. It was only with the greatest of difficulty that I was able to refrain 
from adding them. 

<<< "Not all shares are suitable for trading. >>>
I'd have to agree with you on that one!

       Regards,
                 Phaedrus.

_____________________________________________________________
Are you a Techie? Get Your Free Tech Email Address Now! Visit 
http://www.TechEmail.com

_____________________________________________________________
Run a small business? Then you need professional email like you@yourbiz.com 
from Everyone.net  http://www.everyone.net?tag

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