Replies to post #126601 on Zeev's Turnips Patch-No Politics (ZEEV)

[osprey]

Well said Joe. Stocks actually represent tangible entities in the real world even though sometimes it seems they are just letters and numbers on a computer screen that move around. Warren Buffet calls them part ownerships of companies (they are). In the end, fundamentals always win.

For pure daytraders with a time frame of hours, this may not matter one iota. But many people reading this thread are swing traders, stock pickers, longer term buy and holders. And many people do both, if I got it right even Zeev has a "core" which doesn't end up all cash at the end of every day.

I find valuations just part of the million piece jig saw puzzle. If they are really high relative to common sense historical norms of p/s, p/e, book value one can assume they will correct to the norm sooner or later, usually rather than the p/e moving up, the stock price moves down and undervalued, vice versa. Even daytraders would want to know this. If you are short when undervalued stocks are trending upwards, this is fighting a head wind.

I myself like more tailwind. Since by most measures such as p/es this market is now overvalued, when the trend changes as it inevitably will, the next leg will be down. The big question is when and how much.

[augieboo]

Joe, when I said "valuation," I was referring to overall measures, like PE, not fundamental analysis in general.

I don't think you would want just the Zeev's and the OJ's of the world.

I'm not sure what you mean by this statement, at least as it regards Zeev. (I don't know OJ very well, so I can't say how he picks the stocks he trades.)

But I do know more than the average doggie about what Zeev does. First off, he trades in multiple time frames, from intraday scalps to long-term position trades. Second, he's one of the best (if not the best) balance sheet readers I know. He considers fundamentals on everything he trades, but he does so in a rational manner and uses the fundamental information, first and foremost, to answer the question it is best suited to answer, i.e., for individual stocks, Does the company behind this stock have a future?, and for indices, what does the most likely future of this index/the economy look like?

When I bark about people harping on valuation, I'm referring to the nearly incessant bleating of the vast flock of sheeple on this thread who, seemingly, have nothing better -- and more importantly, nothing more intelligent -- to do with their time than to predict armageddon based on the fact that the PE of the market is too high for their taste.

Most of the time I ignore it. Now and then it annoys me to the point where, during a time of weakness and/or boredom, I am unable to resist commenting on it.

Such is life.

Or, as the French like to say, I surrender.