Forum Archive Index - September 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Macdunk,

>
> I have come to the conclusion that to make real money an Investor 
> must stick to what Is trending.  This I would apply to shares,
> property, farming, and most other business Investments.   This leaves
> the question of when to time your entry.    Most trends only last long
> enough for the smart people to sell to the dummies who get caught at
> the top of the market.     The Idea Is to be first In and out before
> the herd realize Its on Its way down. I always think of It as the hand
> of a clock, climb aboard at half past and out at five to the hour. 
>

Sell near the top, but never try to time the top perfectly.   After all the 
fact that your strategy requires you to sell means that you must have a 
pool of willing buyers to take 'whatever it is' off you.   Selling out a 'five 
to the hour' is probably not a bad way to achieve that.

> 
> What comes next? Is my
> question to the forum. In asking the question I would like to think I
> can reinforce my Ideas of what I think with what Input other Investors
> have of the situation.  The question Is what Is going to trend next?
>  

I have a somewhat different take on this to you Macdunk.   I don't think 
you have to out guess Mr Market  (in the whole investment spectrum) 
sense of the word.  You just have to be there to take adavntage of 
what Mr Market has *already  done* (a reactive strategy).

For example, the retail sector has taken quite a hammering this year.   
This is not total foolishness.   With the prospect of interest rates rising 
in the medium term, that will mean less disposable income for home 
owners and less discretionary spending among the retailers.

However, the retail sector is one that comes and goes.   Just because 
you think Mr Retail might be about to get a knockout punch does not 
mean that he won't be rising from the canvas afterwards.   He always 
does, eventually.    But there are some 'Mr Retail's who can take the 
punches better than others.   And some who can get up off the mat 
faster than others.    I see my task as finding the best Mr Retail I can, 
then get in behind him after he has been cut down to size a bit with a 
few broad punches.     In other words I get behind my 'Mr Retail'  when 
all the Mr Retails are facing a (short term) uncertain future, and have 
unfairly dragged down the reputation of 'my Mr Retail' with them.  In 
other words I get to back my Mr Retail (the best of the bunch) at a 
cheap price.

In the end buying on an uptrend doesn't really matter to be.   As long 
as I can buy in cheaply that is the most important thing.    And a trend 
line can't tell me if I am buying in cheaply (in absolute terms)  or not.

SNOOPY

discl:  Relatively new WHS shareholder



--
Message sent by Snoopy 
on Pegasus Mail version 4.02
----------------------------------
"Sometimes to see the wood from the trees, 
you have to cut down all the trees."




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