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Re: [sharechat] a cautionary tale?

From: Stephen Judd <>
Date: Wed, 25 Feb 2004 20:41:23 +1300

On Tue, 2004-02-24 at 22:36, wrote:

> >Today I sold WRI and WHS, anticipating further decline, at a 13 and
> >15% loss respectively. I'm still in the black overall, but not feeling
> >nearly so clever.
> >
> Did you invest knowing that you would *need* to sell out again within a 
> few months?     

No. You're quite right - the driver was seeing my position eroded.
Must... Not... Follow... Portfolio... Daily...

On the other hand, didn't I see you telling someone a few days ago that
a loss was not just a paper loss but a real one?

> I can spot the obvious flaw in your plan - overconfidence!     Trading on 
> 'gut feeling' is an almost certain way to underperform.

Aye. Hence the subject line.

> >On the menu for investigation: GPG, HQP, FRE, MFT, RNS, PVO, 
> >buying more MHI should it dip, and learning more about ASX stocks.
> > 
> Possibly some good shares in there, but on a value for money basis 
> they are all inferior to the two you just sold.   I think you need to learn a 
> bit more about valuing shares.

On what basis do you value shares? That's not a rhetorical question. I
have a spreadsheet with a couple of formulas for just that, based on
present value of anticipated retained earnings + dividends over several
years. I can read financial statements, but my ability to project is

The shares I mentioned were for investigation, I should stress, not
necessarily purchase.

> Try this for a strategy.   Be greedy when others are fearful, and fearful 
> when others are greedy.   Works for me, and another chap with the 
> initials WB I think.

That strikes me as being equally emotional as following the cored, just
180 degrees around. Sometimes the crowd must be right, as well as wrong.
Clever people often argue that half the population are below average,
without realising that the other half are above.

As a spur to independant thinking, that's a maxim I intend to follow.



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