Not at all investors often suffer long period of loss there is even a big investor that says something like this in the spirit "I know that I chose the good stock when my stomach gets hit". I repeat one of the most important recommandation of investors (read Buffet if you are not convinced) is to NEVER SELL WITH LOSSES so they NEVER CUT A LOSS because it IS THE FRAMEWORK to use TIME as with TIME there is a near 100% PROBABILITY that the stock will return to its FUNDAMENTAL if the fundamental has correctly been judged - so the problem of being a good investor they can fail but they can tolerate some misjudgement of course nobody is God. So stocks like Techs are generally excluded from the list because asserting their fundamental is generally difficult. This debate shows again the herd mentality: because we are all traders including myself, most of us refuse to open his mind considering only the existence of other framework. Instead of "Anyone can pick stocks and hold all the losers. I think you need to read some quality material on proper investing." it would be rather: "Not anyone can be a good stock picker" and like trader an investor which master stock picking knows it and will be able to hold losers to become a winners whereas a bad stock picker will be like a novice trader: a chicken who will be frozen with fear. So the PREMISCE of using an investor framework is to be able to be a good stock picker, not on short term but on long term (using fundamentals evaluation criteria). Chosing for short term is the work of traders. And as I said one is the prey of the others so the stock selection should differ. More generally the CONTEXT notably THE sometimes HIDDEN PREMISCES of an assertion are the MOST IMPORTANT THING to consider. Saying that cutting losses is good or bad should have had no sense if one doesn't refer to the context. Taking context into account is the characteristic of human intelligence compared to machine : the importance of context recognition does even now belong to the most advanced research in neuropsychology (I have already posted a reference book on that from Professor Gerald Edelmann I have the title in French - Comment la matière devient Conscience (How materials becomes Conciousness) - don't remember the true title in english since it is not the same than the title in french).
mrmarket you are a real joker, so you do sell your loser if the fundamental of a company change. But I thought your post say Cutting losers is for loser. So if the fundamental change and you sell your loser are you saying you are a loser too mrmarket Senior Member Registered: Oct 2002 Posts: 198 06-21-03 01:40 PM -------------------------------------------------------------------------------- Quote from AAAintheBeltway: Some of you guys need to lighten up a little and have some fun. MrMarket is yanking your chains, and you rise to the bait like clockwork. OK, MrMarket, how about explaining what if anything will cause you to ditch a loser. Do you run your existing holdings through your various scans to see if they still qualify, or is it a matter of once in, you hang on to them unless they blow up? Also, what percentage do you allocate to each holding? Is it fixed or does it vary over time? -------------------------------------------------------------------------------- Triple A...good questions: I have sold losers in the past...that's what broke my streak of 53 in a row. Normally I will sell them if something fundamental changes in the company or its environment. If a stock's price drops, but the company is still growing its revenues and earnings, I'll stick with it. I can read these companies like an open book, because I understand business processes. I know what makes a company successful, and I know what will make it fail. The percentage on each holding varies...for example if I have 14 stocks in my port, I may invest up to 20% or as little as 3% in any one stock, depending on how much I like it and how much free cash I have. You're a good guy...AAA and I enjoy reading your posts as well. These other guys though need to get a clue.
"You need o move along and get with it." is a comment I make to a lot of people who have potential to do a great job of making money by investing or trading rationally. You feel that you whine and that what I say is crud. These two factors fit into the same category as the misappraisal that was made on Mr Market. when i suggest that a person move along, what I mean is that the person begin the process of realizing what his potential is. You will note in another thread originated by Mr Market I suggested about 6 things mr market could do to improve his performance. This is "moving along". I also suggested that he substitute HOV for NFI as a means to improve his money velocity. What I suggested was that he accomplish a goal in a few days instead of waiting (4 to 6 weeks and also by operating with targets). Mr Market cannot do this as we see. He also cannot "move along". You may "move along" as you stop whining and as you get the picture of my orientation to others. If I see a person with potential who is stuck in a sophomoric place, I suggest that he improve his orientation and also that he "get to work". No one can coach Mr Market for two reasons. He is in a psychological place where he cannot carry out his obligations to others nor can he reason at this point. He feels their is some value in a high number of whatevers as directly opposed to making money. The 8% plus he is making per year is not even close to any type of accomplishment at all. This thread is a specific example of his psychological limitations; he sneaks in an out of ET to show us his state of being. No one really expects him to contribute here; he is not able to. his value to us is as an example of how a person can be in the state that he is in and how difficult it is to for such a person to be able to seek higher ground intellectually and emotionally. It is not sad or anything else. It is just a typical example of the way things get for people.
At some point you might want to chat about picking a context. After that you might want to chat about optimizing the context. After that you could make up a list of items to be included as priorities for making money. MM has a standard against which he measures. Most people recognize the general standard that is used to define standing still regarding wealth buidling. No one is building wealth if he is standing still as measured against a dynamic standard that measures the present and true value of wealth over time. This is the only context for investors and traders to use for determining their excellence. You and MM are in the same boat fishing off opposite sides. Get in a boat that is going somewhere ASAP.
MM methodology actually isnt a bad one for investors or maybe swing traders with a few tweaks... but what he fails to realize is the differences between trading and investing... i guess soemone figured his annual gain with time value to be 8%, a very respectable gain for an investor, but traders shouldnt be calculating and measuring profits in annualized returned gains, rather we get "paid" for having a skill, otherwise soem traders would technically have returns of 1000% or so... coupled with his arrogance and condescending tones he has no place here and should go back to yahoo. if he would act more like a normal dude instead of being so full of himself i might actaully like him.
http://www.elitetrader.com/vb/showthread.php?postid=277636#post277636 and mr monkey's answer: http://www.elitetrader.com/vb/showthread.php?postid=277642#post277642 You bought COH @ 53. You paid $53 for it!! I told you it would goto 45 before 57. See above post. You said that even if it went to 45, you're not wrong!!!???!!! There goes the mystique of mr monkey, COH doesn't count to him now! He's never closing it! Let me ask you something mr monkey, isn't buying a stock @ $45 BETTER than paying $53 for it?? Looks like I was right again. Enjoy this call, it will be my last.
give the guy a break!!! he might have the last laugh in a month or two, who really knows. COH seems to have great fundamentals over the next few years so if i was a betting man, i would bet COH to hit 57 in that time frame. His other picks have worked out and from his method its very apparent that he actually does a lot of homework. I congratulate the guy for having so much discipline. hell i'll even give a look at his recommendations but i'll only buy if the market pulls back a bit market looks a bit toppy for the next lil while so why not buy COH at 45
I actually add on to losers. I mean if you have have the guts to hold a losing trade, you might as well go all the way. Right? You gotta max it out. I mean it's gotta come back right? No discipline needed, just keep hitting that button!