Forum Archive Index - February 2003

["Rory Macewan" <macewarory@student.vuw.ac.nz>]

:) Thanks Phaedrus,

I am open about the fact I am a novice investor and perhaps I was
naive to be drawn into the security of a blue chip investment ;). I
have however drawn a number of conclusions from this investment, and
todays fall in particular, which I consider to be of value in the
future;

- As mentioned above, don't be drawn into the fact that blue chip
investemnts, especially medium growers (which I believed the
warehouse to be) are safe income investemnts
- As a student I have academics forcing rationality down my throat,
there is often little rationality in the behaviour of investors
(especially when they see the shareprice has fallen 5%!)
- I have been basing my investment decisions mainly on fundamental
reasoning and I think I need to learn a lot more about technical
analysis in order to perhaps avoid todays outcome
- I know that a high P:E can be justified by high future earnings
ability but was the warehouse overvalued by the market? Maybe it was
expecting a much higher increase in sales? Add to this the stagnant
sales predictions for the financial year and the relatively limp
performance of the red shed (which suprised me also).

If anyone disagrees, agrees or has something they think is valuable
for a  novice shareholder to know to avoid this situation. I'd love
to hear it :) I hope this question and answer stuff is not annoying
too many of you but this is something that I'd really like to suceed
at. You can read a million books but the real lessons come from
practical experience and if the successes of the people who post here
are anything to go by then there is a lot of experience out there.
Thanks all,
Rory

P.S The Mike Tyson analogy was probably a little vauge, what I meant
is that although you expect a left hand jab, expection is of little
use when you don't see it coming :D  

---- Original Message ----
From: Phaedrus@techemail.com
To: Sharechat@sharechat.co.nz
Subject: RE: [sharechat] WHS Chart
Date: Tue, 4 Feb 2003 14:57:46 -0800 (PST)

>Allan, 
>      I can't tell you whether todays drop is justified or not, but I
>can tell you that it is significant. Price action has plunged through
>the $7.00 support level which had held for months. As I have
>mentioned previously, significant support/resistance levels are often
>found at whole numbers. That's why your stops should be set just
>below a round figure, never at one.
>
>Rory,
>     You shouldn't have been totally blindsided by this - WHS is,
>after all, in medium-term downtrend, and has been for about 8 months.
>It has also been in a short-term downtrend for about 2 weeks. This is
>simply a continuation (and acceleration) of these existing trends.
>The magnitude of the move is surprising, though. There was a
>trendline break Sell signal about six months ago.
>        Regards,
>                Phaedrus.
>PS:- Shouldn't you expect left hand jabs from Mike Tyson? (Perhaps I
>am revealing my lack of boxing knowledge here!)
>
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