Saturday, January 19, 2002 1:06:47 PM
"Trader" vs. "Investor" mentality. . .
It's interesting to watch how many people get all worked up over individuals that purchase stocks in order to sell them at a profit. This "investor" thing is really interesting. Why are these people "investing?" Obviously, the reason they "invest" is to make money in the market. More interesting, why am I going on about it? Well. . .just from some of the interesting commentary stemming from other sites. I think a LOT of people out there need to review the markets and what they are all about. They also need to take a look at what the most successful people in market history did to become "successful" at trading stocks. They DID NOT buy a stock at adequate valuation and hold it for 80 years. Warren Buffet's early strategy (the one that got him wealthy!) was NOT to "buy and hold" stocks. To this very day Warren Buffet will be one of the strongest advocates to say that ANY STOCK IS WORTHLESS! People believe they are buying stock in a company to help the company succeed. NOT. People are buying stock in a company to make a PROFIT off of the company. And hopefully the company's shares will bring them that profit. Wallstreet does not go by ANY procedure for valuing a stock issue when there is a BEAR market. The ONLY value a stock has is the value the attending public will place on it in accordance with "supply" and "demand". Period.
THIS IS A TRADER'S MARKET! However, everyone out there can determine their own definition of investing. I have toured a couple other threads in the past week. I am sorry to say that most of the people on those threads are LOSING their money because their BELIEFS about today's market are not in alignment with reality. The REALITY of the market right now is that there is no REALITY. It's all an illusion. And those that understand the illusion. . .realize that they need to SELL a stock issue after the illusion of a particular issue has worn off. Market makers know exactly what I am talking about. Somebody out there is going to create an "illusion" that one particular stock or another is going to go through the roof. Sometimes, that is the CEO of a company! Hopefully. . .they have a GREAT place to HIDE from the SEC. Another person may be an individual with a following. Not necessarily a registered trader, but someone that others believe knows what they are talking about. However, it is up to the INVESTOR who plugs their cash into the system to decide who they trust. It is MOST important to do one's OWN DD and find out . . .develope. . .whatever, their own strategy for investing. And a good way to develop a strategy is to base one's strategy on HOW THIS MARKET WORKS! So. . .
Here's my philosophy ~~ When you find something that may be in the "public's eye" and appears to have been oversold. Consider doing more DD on it and developing some type of technique that will let you get in at the lowest point possible. After you make a 25% gain (if you have a position of over five-thousand dollars) sell 25% of your position. When the stock runs another 25%. . .sell 25% of your original position. This will leave you with 50% of your holding. . .and a 50% profit. If the company's stock continues to run. . .take another 25% of your position off the table after the stock has provided you with a 100% gain. Hold the other 25% of your original position.. .to see if it can be that "10-BANGER" everyone dreams of. If it doesn't. . .place a "stop-loss" on the remainder of the position and get out while the getting is good! Then. . .Go do your DD and find another stock issue where the "illusion" of the INVESTOR has taken over. Trade the doggon thing after you get gains. Become a part of a winning team of individuals that knows how to identify these stocks with "illusionary" potential. . .and you TOO will be a winner in the stock market.
In Ending:
Stocks have NO emotions. People, however, do. They get VERY emotional about their investments. . .and their BELIEFS are being swayed by somebody, somewhere. . .to stir those emotions. Remain "objective" with your investments and you will be able to get out with a profit. Get overly greedy. . .and. . .somebody else WILL get out with your money. How's that for an investment philosophy
!!!
Peace. . .Have a good weekend. I found a couple of "public illusions" that I'll be selling on their way up
Keep the Faith!
M&M Man
It's interesting to watch how many people get all worked up over individuals that purchase stocks in order to sell them at a profit. This "investor" thing is really interesting. Why are these people "investing?" Obviously, the reason they "invest" is to make money in the market. More interesting, why am I going on about it? Well. . .just from some of the interesting commentary stemming from other sites. I think a LOT of people out there need to review the markets and what they are all about. They also need to take a look at what the most successful people in market history did to become "successful" at trading stocks. They DID NOT buy a stock at adequate valuation and hold it for 80 years. Warren Buffet's early strategy (the one that got him wealthy!) was NOT to "buy and hold" stocks. To this very day Warren Buffet will be one of the strongest advocates to say that ANY STOCK IS WORTHLESS! People believe they are buying stock in a company to help the company succeed. NOT. People are buying stock in a company to make a PROFIT off of the company. And hopefully the company's shares will bring them that profit. Wallstreet does not go by ANY procedure for valuing a stock issue when there is a BEAR market. The ONLY value a stock has is the value the attending public will place on it in accordance with "supply" and "demand". Period.
THIS IS A TRADER'S MARKET! However, everyone out there can determine their own definition of investing. I have toured a couple other threads in the past week. I am sorry to say that most of the people on those threads are LOSING their money because their BELIEFS about today's market are not in alignment with reality. The REALITY of the market right now is that there is no REALITY. It's all an illusion. And those that understand the illusion. . .realize that they need to SELL a stock issue after the illusion of a particular issue has worn off. Market makers know exactly what I am talking about. Somebody out there is going to create an "illusion" that one particular stock or another is going to go through the roof. Sometimes, that is the CEO of a company! Hopefully. . .they have a GREAT place to HIDE from the SEC. Another person may be an individual with a following. Not necessarily a registered trader, but someone that others believe knows what they are talking about. However, it is up to the INVESTOR who plugs their cash into the system to decide who they trust. It is MOST important to do one's OWN DD and find out . . .develope. . .whatever, their own strategy for investing. And a good way to develop a strategy is to base one's strategy on HOW THIS MARKET WORKS! So. . .
Here's my philosophy ~~ When you find something that may be in the "public's eye" and appears to have been oversold. Consider doing more DD on it and developing some type of technique that will let you get in at the lowest point possible. After you make a 25% gain (if you have a position of over five-thousand dollars) sell 25% of your position. When the stock runs another 25%. . .sell 25% of your original position. This will leave you with 50% of your holding. . .and a 50% profit. If the company's stock continues to run. . .take another 25% of your position off the table after the stock has provided you with a 100% gain. Hold the other 25% of your original position.. .to see if it can be that "10-BANGER" everyone dreams of. If it doesn't. . .place a "stop-loss" on the remainder of the position and get out while the getting is good! Then. . .Go do your DD and find another stock issue where the "illusion" of the INVESTOR has taken over. Trade the doggon thing after you get gains. Become a part of a winning team of individuals that knows how to identify these stocks with "illusionary" potential. . .and you TOO will be a winner in the stock market.
In Ending:
Stocks have NO emotions. People, however, do. They get VERY emotional about their investments. . .and their BELIEFS are being swayed by somebody, somewhere. . .to stir those emotions. Remain "objective" with your investments and you will be able to get out with a profit. Get overly greedy. . .and. . .somebody else WILL get out with your money. How's that for an investment philosophy
!!! Peace. . .Have a good weekend. I found a couple of "public illusions" that I'll be selling on their way up
Keep the Faith!
M&M Man
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