Forum Archive Index - February 2004

["Duncan MacGregor" <d-m_macgregor@xtra.co.nz>]

It Is a complete waste of time spending countless hours working out what a company Is worth, doing all the mathematics, without spending five minutes on an exit strategy when the cycle turns.  
The cycle keeps turning, spend the time recognising what the signs are      I admire my old mate snoopy, and the work he puts in at the beginning but when It comes to knowing when to get out when the trend Is over he goes down with It.     The exit strategy Is equally as Important as the buying strategy probably more so, for the simple reason we make wrong calls the lot of us      Why should we tie our money up for years trying to prove to ourselves we were right In the first place.       The moment I think the cycle Is over I get out, regardless of how good the company Is.         Classic example[ high dollar farm Incomes dropping].  I sold wri at $1.30 bought poa for the Americas cup, and made another thirty pc.    I made another thirty pc since then with the same money on hqp.           What about my mistakes we all make them.    I mistakenly thought high dollar retail will be good lost 10pc with two companies with a 50 pc Initial stake.     I always test the water before I jump In.        The exit strategy lets you get out with a small loss If you think a share has reached Its peak get out It owes you nothing take the profit.     My strategy Is 50pc Initial stake with a 10pc stop loss no Ifs or buts and If I prove I am right I buy the other 50pc with a more flexible stop loss.   I only beleive 10pc of company reports the other 90pc Is total rubbish ask their truck driver If you want the truth.
                                   cheers macdunk

  ps Any large buyer with anything up top would never pay $1.45 for wri
they only have to wait. $ 1.00 looming