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The Trend really your Friend???
nipper
post Posted: Nov 16 2018, 01:08 PM
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QUOTE
There is a property in finance where good things tend to get better and bad things tend to get worse. Trend followers know this. Also, turnarounds are exceedingly rare. Everyone loves an underdog, but it is a terrible investment strategy.

It is an achievement for a company to last 100 years. It is hard to last much longer than that.

The Lesson

The lesson here isn’t to dive into your brokerage account and sell your own stocks. The lesson here is that you should exercise a little brainpower and long-term thinking.

I spend a lot of time telling people not to fool around with dumb stuff like bitcoin and pot. It’s also worth telling people not to screw around with stocks that are like an anvil on a glide path. People don’t sell these stocks because they are afraid that they’ll sell the low and the stocks will pop back up. They are trying to minimize regret.

It’s probably not the low.

If we have a bear market and a recession, there will be more stories like this. Actually, the worst part about owning a stock that goes to zero is that it then goes to the Pink Sheets. At that point you won’t be able to trade it, and it just sits in your brokerage account and mocks you when you pull up the screen.

Then it really will be pointless to sell it, because you’ll get something like a dollar....
Jarad Dillian



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
flower
post Posted: Oct 28 2008, 01:37 PM
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In reply to: albion on Tuesday 28/10/08 01:11pm

Albion, precisely my point.

Traders/Observers/Pontificators/Chartists simply confuse THE MOST EXTRAORDINARY SHORT TERM RISE IN THE USD for a NEW TREND.

It is NOT a new trend, but if all the computers in the world say it IS, all the computers in the world and their operators will believe it, whereas you and I (and the silent majority) are getting led by the nose, some of us (not me) dumping the most valuable stocks, just because the charts say so.

We get bamboozled by talk of DEFLATION/INFLATION, when in fact what we have is blind panic and extreme MANIPULATION

We can see what has happened, we can see what is happening, but want we want is some guidance over the Future.

It may be the case NOW that we arent getting shafted by manipulators because the manipulators may have pushed their luck too far, and got most of the world believing the end is nigh, IT ISN'T.

It makes me very sick in the stomach when friends who know you (me) are involved in the stockmarket via super funds, tell me they have dumped the lot for cash.

Perhaps out of this whole disaster will come some good.

Just have a look at this intraday chart of the USD Index, up an unheard of 10% in 14 days, and that constitutes a TREND?
Attached File(s)
Attached File  USD_Index_14_days.gif ( 9.33K ) Number of downloads: 1

 




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Combining Fundamental comments with Fundamental charts.
 
hungry
post Posted: Oct 28 2008, 01:30 PM
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Your all braver than me. Not buying till confirmation of "change of trend" for me.
Might miss the first few % ON the turn - might also save more than a few % BEFORE the turn. Sticking to the old adage of "trend is friend" is fine with me. I like the KISS approach.
I don't have the unlimited billions Buffet has - or the time frame to spare.
Good luck.

 
albion
post Posted: Oct 28 2008, 01:11 PM
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In reply to: henrietta on Tuesday 28/10/08 10:56am

Have to come out in support of Flower on value. The case gets stronger and stronger as the market falls. Sure there is a lot of debt, but there are also very large amounts of cash on the sidelines just waiting to bounce. One of the keys IMO, to at least a very good bounce is the direction of the " new safe haven" the mighty US$. We have seen massive gains in the US$, at some point and I think sooner rather than later, investors are going to ask "Is it safe for me to sit on these large gains much longer, are the currency risks greater than the 1% yield?" The only guy to disagree with that has to be the one operating the printing presses pumping out the US$ at a never ending rate. Time to start picking up a few really good value oversold shares before all those computer programs change their direction.

 
henrietta
post Posted: Oct 28 2008, 10:56 AM
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In reply to: flower on Tuesday 28/10/08 10:45am

Hello flower

Interesting thoughts.

No doubt the computer programs have an effect, but there is also the very real massive bad debts which are scaring the hell out of many people.

The "herd mentality" is always a significant factor.

I think there are good buys out there and have bought a bit today. I try to find "value" and just hope for the longer term.

Cheers
J

 
flower
post Posted: Oct 28 2008, 10:45 AM
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As somebody bought up to always look for a stock that has intrinsic or implied value, this current market correction is thoroughly depressing.

Why depressing?

Because it seems so self perpetuating.

Why does it seem so, or if in fact is it self perpetuating, why?

Having lived through many corrections of many descriptions, not just stockmarket corrections, this time it does seem totally different. Normally a crash is a crash, pure and simple, and it's over fairly quickly, but this time it just keeps rolling on.

Got to thinking: WHY? What's different this time around? eg one cant help but notice that, in spite of the accepted fact that many companies now are totally undervalued, the perceived NEGATIVES of such companies are discussed ad nauseam, why not highlight the known POSITIVES?

If one widens that thought--is it possible that what we see here is mirrored in the world big picture?

Go back 15 years, very few who owned shares had a PC. Go Back 10 years, plenty had PC's, but very few had any trading programmes, and very few traded online.

Currently, around 40% of daily turnover is generated by online traders, presumably that 40% have some sort of trading platform. Widen that further--presumably ALL international players have massive departments with massive PC's with every trading programme ever thought of.

So, my probably totally naive thought pattern suggests that if EVERYBODY keeps thinking NEGATIVE, and trading WITH THE TREND, Negativity will rule quite regardless of VALUE.

SO: Is the Trend Your Real Friend?

The 60% who dont have a PC, who dont have a trading programme, but provide the bulk of investment funds, are completely dumbstruck. Is this outcome desirable?

Has this worldwide computerised trading spun out of control, taking with it the whole notion of intrinsic value as dictated by something as basic as a P/E?

Who will be the eventual winners and losers? or are we all losers in the final analysis?

Courtesy Warren Buffet: " As a group lemmings have a rotten image, but no lemming has ever received a bad press"

Immortal this one; " Be fearfull when others are greedy, be greedy when others are fearfull"



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Combining Fundamental comments with Fundamental charts.
 
 



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