From Investment Gurus by Peter Tanous:
Peter Lynch : The problem with technical analysis is that somebody could love the stock at 10 and hate it at 6. But I have traditionally liked one formation. The stock goes from 50 to 8, then is goes sideways for a few years between 8 and 11. Now if something goes right with this company, the stock is going north. These make a nice research list. You look at stocks that have bottomed out. Its like trying to catch a falling knife, you want the knife to stick in the wood. When it stops vibrating, you can pick it up.
Laura Sloate : In 1973, I couldn't find any stocks that were cheap enough. Management was on my case since I wasn't generating any commissions. At that point, I realized that if you worked for a big company, you would be controlled by the management.
If the average return on invested capital is less than the cost of the capital, you know its a poorly managed company. If we look at our stocks through 91-94, 12 of the 15 stocks that we sold because of a sell discipline of selling at 15% decline, 12 of these were higher six months later when we originally bought them, and a couple were real winners. So, we modified our sell discipline, we don't let it go down and not do anything. Its an evolution of process based on examination of results. Statistically we found that in 80% of the cases, if we had kept the stocks we sold six more months, we would have made money. Most of the bad stuff is in the price; we sometimes bought prematurely.
Thursday, November 22, 2007
From Friends, Lovers, Chocolate by Alexander McCall Smith:
A good work, once drawn attention to by its author inevitably becomes an exercise in self-congratulation.
It always surprised her that her niece seemed uninterested in what people did. For Isabel, it was fundamentally important information if one were even to begin to understand somebody.
A Scotswoman would expect equality and consideration in marriage unlike an Italian woman.
The sentiment sounded trite as most good sentiments did. It was hard to make goodness and good people sound interesting. Yet the good are worthy of note, because they battled and that battle was a great story.
The Germans deserved great credit for their moral seriousness, which is why Isabel liked them so much. Anyone was capable of doing what they did in their historical moment of madness - and their goodness lay in the fact that they later faced up to what they had done.
Everybody's job is like that, I wash things and then they become dirty again. Even the Queen's job is like that. The Queen signs one law and then they pass another. She opens one bridge and then they build another.
What is patriotism but the love of the good things that one saw and ate in childhood?
A good work, once drawn attention to by its author inevitably becomes an exercise in self-congratulation.
It always surprised her that her niece seemed uninterested in what people did. For Isabel, it was fundamentally important information if one were even to begin to understand somebody.
A Scotswoman would expect equality and consideration in marriage unlike an Italian woman.
The sentiment sounded trite as most good sentiments did. It was hard to make goodness and good people sound interesting. Yet the good are worthy of note, because they battled and that battle was a great story.
The Germans deserved great credit for their moral seriousness, which is why Isabel liked them so much. Anyone was capable of doing what they did in their historical moment of madness - and their goodness lay in the fact that they later faced up to what they had done.
Everybody's job is like that, I wash things and then they become dirty again. Even the Queen's job is like that. The Queen signs one law and then they pass another. She opens one bridge and then they build another.
What is patriotism but the love of the good things that one saw and ate in childhood?
Tuesday, November 20, 2007
Tuesday, November 06, 2007
From A Short History of Financial Euphoria by John Kenneth Galbraith :
The only remedy is an enhanced skepticism that would resolutely associate too evident optimism with probable foolishness and that would not associate intelligence with the acquisition or administration of large sums of money.
A further rule is that when a mood of excitement pervades a market or surrounds an investment prospect, when this is a claim of unique opportunity based on special foresight, all sensible people should circle the wagons; it is time for caution. Perhaps, indeed, there is opportunity, but a rich history provides proof that as or more often, there is only delusion or self-delusion.
So, comes down to being fearful when others are greedy and greedy when others are fearful. Buffett was right all along with his one liner as was Templeton.
The only remedy is an enhanced skepticism that would resolutely associate too evident optimism with probable foolishness and that would not associate intelligence with the acquisition or administration of large sums of money.
A further rule is that when a mood of excitement pervades a market or surrounds an investment prospect, when this is a claim of unique opportunity based on special foresight, all sensible people should circle the wagons; it is time for caution. Perhaps, indeed, there is opportunity, but a rich history provides proof that as or more often, there is only delusion or self-delusion.
So, comes down to being fearful when others are greedy and greedy when others are fearful. Buffett was right all along with his one liner as was Templeton.