Forum Archive Index - February 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Craig,
 
>>
>>
>>investment on the sharemarket with ridiculuous expectations and a
>>time frame of less than two years you are a speculator, not an
>>investor.  
>>
>>
>So the definition of "Investor", is someone who buys and holds 
>for a period of greater than 2 years, regardless of the shares 
>performance?
>
>
Yes, with one rider.

Regardless of a shares performance, *provided the reason behind 
making that investment in the first place hasn't changed*.

Forget the share price for a minute.

If you invested in Tower for the long term growth of its business and 
the anticipated growth of dividends, then what has changed?

1/Does Tower still have good medium term (2 to 5 year) growth 
prospects?  Yes.
2/Does Tower still pay a good dividend, and is it liable to do so in 
the forseeable future?  Yes
3/Is there a real prospect of Tower being taken over?  Yes.

So if those were the reasons you bought in two years ago, why would 
you sell now? 

Provided, that is, you also ask the questions

Have there been any unusual writedowns in the results or global 
shifts in business trends that will materially affect the business? 
 
Answer. No.

Has the price gone up drastically so that the share price now 
reflects too much 'blue sky' (in your judgement).  Answer No.

Therefore as an investor there is no reason to sell TWR.  No need to 
consult the charts. By the chartists own admission the medium 
to long term chart for TWR has been going nowhere over the last 
couple of years and is basically trendless.  You can't tell anything 
from a trendless chart.   So it won't help you making decisions.   
SNOOPY











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