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IBDvalueinvestin (99.59)

People enter the market for one thing and one thing only "TO MAKE MONEY"

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July 02, 2010 – Comments (10)

Some on here keep saying I am a flipper?

 

Well, thats because my plan is to make money and being stubborn when the market goes against you does not make you money, it only makes you lose money. The market sentiment can change on a dime  based on new data and if you don't want to change with the data then you will be hit by a freight train of sellers. "I have been under that freight train in the past and did not like that experience"

 

Even when your theory is correct on a stock or the market in general for the longterm, Its the short-term downside that can wipe you out before you ever realise the longterm prospects that may be had.

Therefore just like the weather changes from sunny to cloudy to rainy so does the stock market.

So if your stubborn and want a tan on a cloudy day, you still can get it but eventually it turns into a rainy week and you will get left in the cold all by yourself because everyone else has gone into hiding just like in a bear market people go to cash or start shorting heavily.

 

 

10 Comments – Post Your Own

#1) On July 02, 2010 at 12:05 PM, IBDvalueinvestin (99.59) wrote:

Some are getting a big tan today with ONP , on a shocking huge upside move but that does not change the fact its a cloudy day and could rain heavily at anytime.

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#2) On July 02, 2010 at 12:11 PM, chk999 (99.98) wrote:

I'm a little curious about your statement that short term downside can wipe me out.

Suppose I buy a company, at no danger of bankruptcy, at what I think is a substantial discount to intrinsic value. We then have a market crash and its price goes down. I have a mark to market loss, but no actual loss until I sell. If my estimation of intrinsic value was roughly right, I will make money when the market returns to normal.

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#3) On July 02, 2010 at 12:20 PM, IBDvalueinvestin (99.59) wrote:

How about the effect of pyschological factor? When people in general see big paper losses, their first reaction is to avoid more losses by selling.

Its a human nature reaction to save what they got left.

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#4) On July 02, 2010 at 12:39 PM, Teacherman1 (49.23) wrote:

I agree with you chk999.

If someone buys on margin, or is playing with money they need, then they can get wiped out; but if you are willing to wait and watch, then taking advantage of a "fear factored" price to buy stock in a company you like, is a good idea.

Since I am not in or running a hedge fund, I don't have to do anything but wait.

You are correct IDBvalueinvestin, many people panic and sell because they get frightened, so being on the side lines, out of the rain is a good idea for them.

Have a great day. 

JMO and worth exactly what I am charging for it.

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#5) On July 02, 2010 at 1:27 PM, Dow3000 (< 20) wrote:

Possibly worse than buying in 1930, this is no ordinary recession...blink and you could lose your shirt.

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#6) On July 02, 2010 at 1:51 PM, simplemts (< 20) wrote:

IBD, why I ride you so hard is you are not "making money" with your ideas on your blogs.  You are a reactionary, commenting "go to cash" AFTER the market tanks several percentage points.  Then, when it rallies up, you say "Go Long!" and pick specific stocks.  Of course, for the last 3 months, you have been "selling" at near-term bottoms, and suggesting people go "long" near the short-term tops.  You are performing classic sheep behavior that most retail investors fall too.

 In regards to ONP, I am thinking like you however, I bought at $6.67 and $4.75, and sold today at $7.47.  I believe I will again be able to buy under $7 some point in time, but if not I am happy with a 30.71% gain in 2 days.

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#7) On July 02, 2010 at 2:29 PM, Griffin416 (99.98) wrote:

I agree with simplemts, fear should never run your financial life. If you are a trader and rely on technicals, you should be out of the stock when it starts going down, say 2%...wipe your hands clean and look for something else.

If you are an investor and do your homework, stocks that go down are cheaper and should be bought, not sold. Say, MHS, it went from $65 to $55 in a blink. is there currency risk, no, earnings drop, no, bad news via losing market share, no...the stock is cheaper and need to be bought at $55 versus $65

Secondly, never go all in or all out. as the market goes up, start scaling out of positions, as it goes down scale in.

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#8) On July 02, 2010 at 3:05 PM, chk999 (99.98) wrote:

How about the effect of pyschological factor? When people in general see big paper losses, their first reaction is to avoid more losses by selling.

Its a human nature reaction to save what they got left.

Perhaps these people shouldn't be investing in equities if they are that trigger happy. 

"Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years." Warren Buffett

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#9) On July 06, 2010 at 11:06 AM, IBDvalueinvestin (99.59) wrote:

Griffin416 thanks for the heads up on MHS, it certainly looks to have gone in sympathy with AMED, which it should have not because MHS does not have any type of SEC problems like AMED has, should rebound rather quickly.

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#10) On July 06, 2010 at 3:26 PM, Griffin416 (99.98) wrote:

MHS was not a formal recommendation, just an example of how fundies and stock action are out of line. Although I am long it, for a long time and the stock barely went down during the big crash. I believe if you can withstand short term pain, it is a good hold. I expect them to raise guidance on July 22.

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