tag:blogger.com,1999:blog-30128229.post5811596384460612137..comments2023-09-30T07:11:55.493-06:00Comments on MarketFN.com: Market ClichesInvestment Househttp://www.blogger.com/profile/14771320644915759241noreply@blogger.comBlogger20125tag:blogger.com,1999:blog-30128229.post-6310213788824996602008-05-02T09:53:00.000-06:002008-05-02T09:53:00.000-06:00Ain't it the truth, Anon.Bill KraftAin't it the truth, Anon.<BR/>Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-61104383584031572492008-05-01T03:24:00.000-06:002008-05-01T03:24:00.000-06:00October, this is one of the difficult months to tr...October, this is one of the difficult months to trade stocks. The other are July, January, September, April, November, May, March, June, December, August, and February. Mark Twain.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30128229.post-7610277065173726992008-04-28T07:04:00.000-06:002008-04-28T07:04:00.000-06:00RSC, I think that buying the laggard can be a very...RSC, I think that buying the laggard can be a very viable strategy as long as the laggard has positive fundamentals and is showing a technical entry. I was recently asked to review an interesting and soon to be released book, <I>"Wall Street's Buried Treasure,"</I> by Harvey Houtkin (Wiley 2008) that, in large part, looks at this strategy. You may enjoy reading it when it is released. Like so many of the sayings, "buying the laggard" has a lot of positives going for it, but it doesn't quite tell the complete story.<BR/>Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-42320201702137099402008-04-28T07:02:00.000-06:002008-04-28T07:02:00.000-06:00Fifty years ago, The Rule was to buy the laggard--...Fifty years ago, The Rule was to buy the laggard---(in a sector). Any thoughts about this investing strategy--A fast money trader believes it is a bad strategy--however, I never lost money on a trade of this nature.<BR/>RSCAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-30128229.post-62275587942562058622008-04-28T06:48:00.000-06:002008-04-28T06:48:00.000-06:00Thank you, Mr. Kawar. The only additional thing I ...Thank you, Mr. Kawar. The only additional thing I would note is that contrary to the saying: "it ain't over until the fat lady sings," the truth is the fat lady doesn't sually sing at the end. The fat lady sings at the beginning. Maybe that is a way to emphasize how important I think it is to have an exit strategy in place from the beginning.<BR/>Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-35658022777196453622008-04-28T00:11:00.000-06:002008-04-28T00:11:00.000-06:00Dear Mr. Kraft, I very much liked your "Market Cli...Dear Mr. Kraft,<BR/> <BR/>I very much liked your "Market Cliches" and also thought myself about a few sayings we commonly use in real life, that could as well be applied to the Market. For example, like Woody Allen's old movie "Take the Money and Run". I especially think about this title when I make a fairly sizeable profit in a certain position after a long agony of living in the house of pain (funny I suddenly think about Jim Cramer). Another common saying is "It ain't over until the fat lady sings!". I especially think about this one when the Market or a Stock Sector deteriorates and I find myself waiting for some sort of a sign (I am sure you are familiar with a bunch of these) that indicates that the Bear Market has been finally brought down to its knees and a Rally is well on its way. My late father used to say something like "Hit Hot Iron!", and I believe what he meant by this is that many investors regardless of the type of investment, are usually afraid of taking a big position into what they have been waiting for so long to come down in price to where they really wanted it, and they suddenly chicken away. Well, my dad was usually not a risk taker, but he firmly believed that when the opportunity knocks, hit hard and hit strong, for maximum appreciation of your calculated risk. And, I believe that my late mother, who never really directly invested in the Market other than by marrying my father, used to say something like "My Mother threw me and the Virgin Mary Caught Me!", and I believe she meant by this something of the same nature to what I mentioned about my father, which is "When the opportunity arises, you have to eventually overcome your fears and transmit a message to your brain that, if not taking a position into this stock is finally now, then when?"<BR/> <BR/>Again, reading your columns is very pleasurable, since they always relate to experiences that almost every trader goes through.<BR/> <BR/>Best Regards,<BR/>Nadim... from FloridaNadim... from Floridahttps://www.blogger.com/profile/08148926197078433573noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-85884199418393407892008-04-27T19:00:00.000-06:002008-04-27T19:00:00.000-06:00Some more great points, Patrick. Thank you.Bill Kr...Some more great points, Patrick. Thank you.<BR/>Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-85718008238441737722008-04-27T09:59:00.000-06:002008-04-27T09:59:00.000-06:00Funny you should mention Enron. If you watched the...Funny you should mention Enron. If you watched their financial statements, you could see that the company was cratering all the way, even as all the analysts continued to issue buy ratings. Like I said, we sell stocks when the assumptions we made about them are no longer true, or when we think they have risen to at least what we thought their actual valuation was. If a company we like, which we think continues to have good management, has a huge pullback in stock price, we will continue to hold -- or perhaps expand the position. I know most people say never to average down, but that is really a trading strategy and not an investing strategy, at least in my book.An AFIB patienthttps://www.blogger.com/profile/01394095538651362926noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-91392407800265136302008-04-27T09:56:00.000-06:002008-04-27T09:56:00.000-06:00Thanks, Anonymous, for your definition of "hold un...Thanks, Anonymous, for your definition of "hold until when." It differs somewhat from Patrick's definition, but, quite interestingly, you each rely on a fundamental change as the exit strategy for "buy and hold" investors. In Patrick's scenario, I see no definition of when the "buy and hold investor" would have exited. I am interested to see what specific fundamental change or changes constitute your exit strategy. Without necessarily revealing the exact parameters, do you have specific indicia that precisely define for you what you mean by "a <B>*negative change*</B> in fundamentals?" While I like and appreciate your concept, the broad term "negative change" is too undefined and open to subjectivity for me, personally. That is not to say that it isn't a good strategy. I suspect it could be depending upon implementation.<BR/>Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-86397422225622665842008-04-27T09:48:00.000-06:002008-04-27T09:48:00.000-06:00Patrick, thanks for a great comment. You have def...Patrick, thanks for a great comment. You have defined what "hold" means to you in "buy and hold" and have thereby set out your exit strategy when the stock goes up. What is the strategy when it goes down? You mentioned a 50% dip in Berkshire Hathaway from which there was a recovery. What about stocks like Enron, or some of the bankrupt airlines, or WorldCom where investors lost everything? Is that an acceptable result? It may be if the investor makes more overall than he loses on the ones that disappear. We should always remember that if a stock loses 50% of its value, it must move up 100% just to get to even and, Berkshire Hathaway aside, not too many achieve that goal.<BR/>Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-83525592787005707702008-04-27T09:45:00.000-06:002008-04-27T09:45:00.000-06:00Anonymous, I think the philosophy of your investme...Anonymous, I think the philosophy of your investment is pretty common to a lot of retail investors as well. Does your club have any exit strategy at the time it enters a position? It might be fun to ask that question before the next buy to see what you stir up. I can see the reasons for some of the bad impressions of day trading, but I think people shy away from short term or swing trading because they don't really understand how to go about it.<BR/>Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-76724714122458812572008-04-27T09:43:00.000-06:002008-04-27T09:43:00.000-06:00Sam, that's what I've heard about Mr. Buffett, too...Sam, that's what I've heard about Mr. Buffett, too. No question buy and hold can be a successful strategy if we have the time to hold and don't care what the 'ups and downs' are in the meantime. I'm like you. I always have an exit strategy. I don't think Mr. Buffett needs one anymore; I guess he was just a lot smarter a lot earlier than I.<BR/>Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-61629070758464765112008-04-27T09:42:00.000-06:002008-04-27T09:42:00.000-06:00Glad you are enjoying the articles, Gary. I'll tr...Glad you are enjoying the articles, Gary. I'll try to cover a lot of these cliches as time goes by. I'm always interested in readers thoughts.<BR/>Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-72423777186888555962008-04-26T19:13:00.000-06:002008-04-26T19:13:00.000-06:00Diceyliving, that may be the most important one of...Diceyliving, that may be the most important one of all. We can profit playing the market in either direction, but when we let greed take over, we generally get flattened.<BR/>Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-37390130017051824412008-04-26T13:08:00.000-06:002008-04-26T13:08:00.000-06:00The "buy and hold until when?" question is fairly ...The "buy and hold until when?" question is fairly easy to answer. When buying a position for what you intend to be a "buy and hold" position, you first buy a quality stock and then you hold until there is a negative change to the fundamentals of the company. That is, your reason for holding the quality stock has diminished or evaporated entirely.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30128229.post-56967584876632671352008-04-26T10:57:00.000-06:002008-04-26T10:57:00.000-06:00So many people seem to not have an understanding o...So many people seem to not have an understanding of "buy and hold". First, you must be a good appraiser and buy companies which have good management and are undervalued. You buy these companies as if you plan to own them for 20 years. You hold them until their stock price has risen to, or exceeded, their intrinsic value, or until any assumptions you made in valuing the company prove to be in error. This might be a year, or it might be 25 years. That's why it is called "buy and hold". If you let your emotions rule you and decide to sell as soon as you see a 30%-50% price drop in a stock you own which you do not think has risen to meet its intrinsic value, then you need to stay out of the game. Even Berkshire Hathaway lost 50% of its value one year. It came back and far exceeded the previous levels, however.An AFIB patienthttps://www.blogger.com/profile/01394095538651362926noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-90108646592132671402008-04-26T10:48:00.000-06:002008-04-26T10:48:00.000-06:00I agree with your artical 100%. I belong to an inv...I agree with your artical 100%. I belong to an investment club with 20 members. The club is characteried as a "buy and hold" investing group. We haven't made any money in 5 years. Most members believe in the b&h philosophy but havent a clue about taking a profit or setting up a plan to cut losses. Actually, we pretty much "MARRY" our stocks. In the 5 years we only sold about 4 holdings because we had a good profit. We probably sat on about 40 holdings because we love the stock. We only look at the bright bit of good news and turn a blind eye toward mounds of bad news.<BR/>I think many feel that trading is a bad word and do not want to be associated with the stigma. Thus we are investors and we hold for the long term, which gets longer at each monthly meeting.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30128229.post-83925798074360000832008-04-26T10:42:00.000-06:002008-04-26T10:42:00.000-06:00Hi, Great reading each weekend. Warren Buffet I am...Hi, Great reading each weekend. Warren Buffet I am told bought Coke a cola years ago. Splits and reinvested dividends take care of this stock.<BR/>I am older and need stops on all of my trades<BR/>Keep up the great work, SamAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-30128229.post-24175836359250500332008-04-26T10:02:00.000-06:002008-04-26T10:02:00.000-06:00I've never commented to you before, but I thorough...I've never commented to you before, but I thoroughly love all your articles and look forward to reading them each weekend.<BR/><BR/>I totally agree with your assessment of 'buy and hold'. You must have an exit strategy as well as an entry trigger.<BR/><BR/>Please discuss 'the trend is your friend'. Is this a self-fulfilling prophecy? Are all the common sayings self-fulfilling? I don't think they are because they fail too many times.<BR/><BR/>Also discuss the cliche 'cut your losses, let profits run'. I think this is integral to any strategy a person may use.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30128229.post-29986974152153732592008-04-26T08:13:00.000-06:002008-04-26T08:13:00.000-06:00How about "Bulls make money, Bears make money, but...How about "Bulls make money, Bears make money, but Pigs get slaughtered". - diceylivingAnonymousnoreply@blogger.com