Forum Archive Index - September 2003

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

Hi Stephen,
 
Welcome to the world of investment :-) and spam :-(

> 
> I've been reading this list via the web archive, and decided it was
> time to join in.
> 
> I bought my first lot of shares about 10 weeks ago, and since then
> have enjoyed a pleasant 4% increase post-brokerage in my selection of
> MHI, BCA, POT, WRI, and WHS. 
>

Glad to see you have got a portfolio together, rather than putting 
everything on one 'horse' going for the big win.   

On the minus side that portfolio looks a little skewed towards the retail 
sector with MHI, WHS and WRI, even if WRI is really 'industrial retail' 
and in a slightly different category.   On the plus side you should have 
picked up all of those at quite good prices, which is probably the most 
important ingredient in successful investing.

>
>Because I don't have enough to invest to support the brokerage 
>costs of frequent trading, 
>

Actually it is often the other way around.     Those with little capital 
jump into trading as a way to make it big fast.   Unfortunately trading is 
not an easy discipline to master.   There are a few people who make 
their living from trading that participate here.   But generally these are 
the ones that have put in years of study into trading and risk 
management.   Those who buy a computer program and try to get rich 
quick seem to last only a few months at best, if the rate of churn of 
posters is anything to go by.

>
>I'm guessing that Snoopy and I would probably share a
> lot in common in philosophy.
> 

OK, I'll try to answer your question :-)

>
> Question: what's going on with POT?
>

No idea sorry.  I don't follow this company closely.   There are others 
on this site that do though.   I will bow to whatever insights they give 
you.

>
> I'm not worried by their recent
> decline yet, but I don't understand what's driving it. 
>

Long term the thing that will drive the share price of POT is that it is a 
good business with growing profits.   Short term the price may bob up 
and down with the general tide of the market.  Perhaps there is a 
company specific reason to explain the POT share price movement, 
but equally well there may not be any reason.   Mr Market does behave 
irrationally at times.   Irrational share price movement is a fact of 
investment life.

You have to remember that investments in the sharemarket can be 
volatile.   I am not aware of anything that has turned POT into a long 
term dog in the past ten weeks.    Consider any mark down in share 
price of a share that you have well researched as a buying opportunity.

In fact I would go as far as to say that any investor without a least one 
'loser' in their portfolio is probably not taking enough risk to succeed.   
My own dog this year has been RBD.   But it is one of the last shares I 
would consider quitting or even have any worry about.  

IME, it is the highly priced shares that a far more likely to burn you.

SNOOPY


--
Message sent by Snoopy 
on Pegasus Mail version 4.02
----------------------------------
"Q: If you call a dog tail a leg, how many legs does a dog have?"
"A: Four.  Calling a tail a leg doesn't make it a leg."



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