Forum Archive Index - June 2003

["Richard Hooper" <hoop@ihug.co.nz>]

Hi Snoopy Ouch and double ouch! But the question remains: What did you learn from this experience so that others don't make the same mistake that you did? Before 1999 I would have considered myself a pure FA long term investor..since then I now mix TA & FA, I have been convinced that TA is a an important tool, as  well as other tools of course..ie cost accounting ,trends using extrapolations, watching competitors and changes to microevents such as Govt regulation changes macroevents such as Iraq war, oil prices, etc  etc  etc In using fundamentals only, one tends to totally ignore Brokers, financial advisors, noisychatters and rumours which would show up in the behaviour patterns to chartists. I bought into Brierley as the balance sheets and profit and loss statements seemed sound, unaware of the term "intrinsic value" (IV). Any company is legally allowed to price their assets at any price they like, especially if they own the company outright and there is no way for the market to determine its  "true Value ". When Brierley got into hot water the management produced financial statements which became less and less in touch with the reality of the outside world which was rapidly changing under the Asian crisis. When the crunch finally happened during the Asian Crisis ( to which BRY was very exposed.) the IV of Brierleys assets were found to been greatly exaggerated, and the house of cards came tumbling down,bringing me and a lot of mum & dad investors with it.   IV has to be used as it is a form of accounting to calculate NTA, etc, but it can also be used unwisely, hence unethical, by companies who have their blinkers on and won't admit that some of their assets are crap. I am wary in investing in any investment company that have total control of another and IV is used to value it without reference from outside valuers. Sometimes an investor has no control e.g when the CEO or owners runs away with the money and bankrupts a perfectly great company. They might end up in jail but that is small consolation. Have I learnt anything ? yes to some things.. Don't fall in love with a failing company don't try to average down with a dog (falling knife) Don't believe in everything you read, including financial reports..Look for things the company don't tell you. Don't be emotional ..Emotions kills discipline.    But there are all sorts of other unknowns out there that can stuff you up..that is the risk you take in being an investor. oop -------Original Message-------   From: sharechat@sharechat.co.nz Date: Sunday, 22 June 2003 23:46:57 To: sharechat@sharechat.co.nz Subject: Re: [sharechat] Dogs Tales of the Century   Hi Hoop, > > I bought 30.000 Brierley at its peak {$1.40) in 1997 or 1998 ( don't > want to remember). Think that's bad ....watched it fall to 97c a few > months later and decided to buy another 26000. > Ouch and double ouch! But the question remains: What did you learn from this experience so that others don't make the same mistake that you did? SNOOPY -- Message sent by Snoopy on Pegasus Mail version 4.02 ---------------------------------- "Dogs have big tongues, so you can bet they don't bite them by accident" ---------------------------------------------------------------------------- To remove yourself from this list, please use the form at http://www.sharechat.co.nz/chat/forum/ .

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