Forum Archive Index - September 2000

["Peter Maiden" <pmaiden@today.com.au>]

Mark and Brian - certainly there has been some large movements down in the last 
few weeks. I just clicked on the baseline button on my Watchlist on the the 
NetBroker site ( I didn't know that button existed but a good feature) and 
noticed that some I had put on there had large falls over the last 5 weeks (ADV 
-25%, Newcall -15%, RMG - 24% TEL -16% etc).

Fortunately for me these have been only watched. Maybe some buying 
opportunities coming up.

On the other hand there has been some good gains (RNS +75%, GPG 15% and even 
WHS +5%) and by picking the right ones the last month or so has been pretty 
good for.

I hope that some chatters did have a closer look at RNS because of my regular 
touting of them over the last few months.

Some research from "The Journal of Finance" shows how hard it is to keep ahead 
all the time. Have a read = 

Individual investors who hold common stocks directly pay a tremendous 
performance penalty for active trading. Of 66,465 households with accounts at a 
large discount broker during 1991 to 1996, those that trade most earn an annual 
return of 11.4 percent, while the market returns 17.9 percent. The average 
household earns an annual return of 16.4 percent, tilts its common stock 
investment toward high-beta, small, value stocks, and turns over 75 percent of 
its portfolio annually. Overconfidence can explain high trading levels and the 
resulting poor performance of individual investors. Our central message is that 
trading is hazardous to your wealth.


However read in context with something that was stated in that review that Ben 
got us to read about PE's and valuing companies. It was shown that holding a 
good parcel shares over time (5 years or so) generally outperforms returns from 
bonds etc.

Things will go up and down  these days on sentiment rather than any other 
logical reason. However if your research or whatever lead to a decision to buy 
into a company and you believe that nothing has fundamentally changed then keep 
with it.

Hopefully things will get better soon and we will all be a lot happier.

Peter      

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