Forum Archive Index - December 2001

["hugh webber" <hugh.webber@clear.net.nz>]

hmmmm, there is an alternative even if the dire predictions are right - that is 
to invest for
sustainable long term high yield. That way it doesn't really matter what the 
price is but it is
likely that the price will move up anyway. It has been noticeable to me that 
when there is a rout
that some good quality shares rise even while the mass is going down, some of 
them mark time, some
even lose a little bit - temporarily.
While those who invested on trendy numbers amongst the mass on the basis of 
fashion, glamour,
beat-ups, charting, are left stranded.
Its the ratios and the sustainability and the quality of the management and the 
type of market and
technology that the coy is selling its product into that counts in the end.
And that's what Warren Buffett keeps proving. Remember the howls of derision 
that greeted his
decision not to invest in the "tech bubble" because "he couldn't understand it" 
and the howls of
derision that greeted his temporarily sparse returns while people who had 
bought up large into say
Amazon.com were into the manic stage of a manic-depressive cycle.

cheers,
Hugh

----------
> From: winner69 . <wwinner69@hotmail.com>
> To: sharechat@sharechat.co.nz
> Subject: [sharechat] Mary disagrees with Warren (in a round about way)
> Date: Saturday, 1 December 2001 12:44
> 
> Viewpoint - I agree with you in that Mary doesn't really know (or want to 
> understand) the realities of the world. In my opinion she is doing a lot of 
> investors an injsutice and costing people money.
> 
> Reading her column todat even appalled me more
> 
> If she had bothered find out about what the seminar was all about her views 
> might be different.
> 
> I have been to that seminar - it was not a hard sell of anything. Just a 
> presenter passionately telling a pretty compelling story about his views 
> where the markets might be heading.
> 
> Mary makes much of (quote) I doubt if there's ever been a 10-year period 
> when returns declined, let alone a 14-year period
> 
> How's this for a bit of compelling  bit of evidence Mary -
> 
> Dow Jones Industrial Average
> Dec. 31, 1964: 874.12
> Dec. 31, 1981: 875.00
> 
> Yes Mary, over 17 years the Dow gained exactly one-tenth of one percent. 
> They must have declined in some ten year periods in that time.
> 
> Those numbers I have taken from an article by Warren Buffett in the lastest 
> Fortune magazine.
> 
> The gist of Warrem's article is exactly the same as that the presenter that 
> Mary so disdained was telling us about
> 
> The conclusions were very much the same - the US market has had a 17 year 
> bull run and is currently in decline, in all probablity for the next 17 
> years.
> 
> Warren's views are more conservative about the future but even he is not 
> expecting much in the way of returns in the foreseeable future.
> 
> Read Warren's article. The presentation that Mary referred to used some of 
> the same data and ideas.
> 
> http://www.fortune.com/indext.jhtml?channel=print_article.jhtml&doc_id=205324
> 
> Pretty sobering stuff and on this evidence something that Mary, or any 
> investor, should not discount likely
> 
> My own view is that sharemarkets will show negative returns for some time. 
> That is not saying I have to get out of sharemarkets but means that to make 
> gains I will need to do short to medium term trading in the stocks I fancy.
> 
> I believe I will only win if I take profits at the first sign of weakness in 
> any stock I hold.
> 
> And for those that are not showing profits I will need to minmise losses by 
> getting out - not hoping that one day the market may turn. As Warren points 
> out I might have to wait seventeen years to get back to square one.
> 
> 
> 
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