Replies to post #646973 on Zeev's Turnips Patch-No Politics (ZEEV)

[fabian]

Cincy-It is hard to believe it got that out of hand. We'll never see a mania as outrageous the rest of your lives.
Timing the sales of goofball companies was interesting. Obviously one could not go by valuation as any semblance of reasonable valuation had left 20 to 50 X ago.
You had to be laser locked into the psychology first and charts second. The charts reflected psychology but it was not enough.
Sheer art determining how crazy was the end of crazy and pulling a sell.
Sure wish once in a life time mania's of that degree came about every decade or so.
[yes, they would not be once in a life time mania's]
There have been manias and will in the future but that was the one that broke through extreme boundaries ...at least since Tulip Bulbs were going for the equivalent of $14,000 a piece.
A wonderful time it was.
I rarely criticize Buffett but he did miss out on an unbelievable money making opportunity.
But, it required total flexibility of style. Valuation out the window.
You could not believe in the non-sense for a single minute but you could sure do well gaming those who did.
Fabian
What is scary is that so many who believed in it were smart experienced, and well educated professionals.
It was a stunning example of the grip mass herding psychology can have, taking control of minds even though those minds on an intellectual level deep down knew it was a farce. Many were powerless to wrest control of their minds back.
We gave back some of those gains. [luckily not the majority]
How did we manage it?
They topped, we sold.
Then the slaughter hit full force, we bought back SFE and ICGE on the way down. Down 75%! thinking...OK, so they are not a good value but surely they are way over cooked technically and will bounce up. No stops.
Daing...the damn market just came up with a new BOTTOM and LOW on them...down 90%, They just HAVE to bounce, buy some more!!!
Screw that crap!
They went down 99% and bounced 30% which brought them to a 97% loss or something stupid like that.
You get the idea. Ball game over...no chance in 20 years of breaking even on those buys. Tax loss city.
And some wonder why we get a little uptight about BOTTOM PICKING, BUYING AT THE LOWS??
Please believe us. We've tried almost every "method" in the book and have scars to prove it.
And, from doing it a long time, out skills at bottom picking were way above average.
Way above average is no match for a flawed strategy.