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Toll Brothers Inc. Message Board

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  • MINCE38 MINCE38 Dec 21, 2003 6:56 PM Flag

    Sector Rotations

    Doc,

    I agree with you and marketdoom. However what amazes me is that the market appears to be a huge ponzi scheme and everyone keeps buying anyway! I mean, you dont think the institutions who account for 80% of the buying in the market know we are at historical valuation highs for stocks. Know what the average stock p/e was after the 29 crash? 6!!!

    Thats right. 6. And the s&p avg p/e of close to 40 will not be supported by increasing growth enought o suport this. So.......who is buying all the stock???? Me, I learned, the trend is your friend. I am a buyer because everyone else is.I feel like the insiders, the big boys who will be the 1st to get out at the top are saying to us silently......"look, you know the market is rediculously overvalued and so do we. But lets keep on buying, driving prices up and then lets play hot potato. LETS SEE WHO GETS LEFT HOLDING THE BAG!"

    Me, I own mostly canroys(canadian oil and gas trusts which are paying 12-20% yields and giving off nice growth! Also I like JOE, florida developer whose real land book value is 3-4 times the stock price!!!!

    I am available for consultation at anytime. I am not a pro-trader but lets just say I can outperform most of them. -)

    happy trading and happt holidays,
    Marc

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    • Some of the best advice you could buy comes from Paul Desmond at Lowry's Reports.

      I wouldn't trade without it. You can get quite an education as well.

      You should respect the major trend of the market.

      The Doctor...

      • 2 Replies to Doktor_Katz
      • Sorry to disagree again. I used to subscribe to a variety of investment services from A-Z. I don't know about the one you recommended but I am extremely wary about any advice, paid or unpaid. George Soros, Bill Gates, Warren Buffet, etc don't give advice. I'm afraid when it comes to investing you are on your own. Rules I follow and that have worked for me.
        1. Overriding rule. the direction of the economy. A rising tide lifts... etc. You can't buck the economy and need to be overall long as long as the economy seems to be improving. Our economy is enormous and so the laws of inertia apply in extreme. When going up it will continue in the same direction for some time. You'll have ample time to get out should the direction change. The only crash (excluding 1929 when market condition were rather different) was in '87 and that represented a terrific buying opp as has the recent market slide io 2002.
        2. Charts of individual stocks are worth little IMHO without some knowledge of the business of the company involved, i.e., fundamentals. Stocks tend to get overbought on the up side and often get sold off sharply just when you buy. Therefore, the risk in following a rag like IBD is enormous. Stocks that go up like rockets tend to down just as fast.
        3. The main value of charts is to notice long periods of flat valuations followed by an uptick in vol and price or steady and gradual price share appreciation without too many up or down days in a row.
        4. Stocks usually get oversold on the downside just as they get overbought on the upside. Forget valuations. Remember, its all about buyers and sellers. When the sellers start to fade, for good companies, the buyers will come back in. One example right now in large cap stocks is JNJ. There are many others. It is the basis for the Dogs of the Dow theory which works most of the time. Everyone likes to buy a bargin.
        5. If the story sounds to good it almost always is.
        6. Don't underestimate the importance of analysts opinions. Particularly when they gang up. However, if you chose the right companies and the opinions are too negative I would say buy if you have a long term horizon (6-12 mo). Examples today: EK, Medi, Nwl. There are many others. Extreme negativity is, more often then not a strong negative and extreme positivity is usually a negative. In other words a contrarian approach is your best shot at success, i.e, buy low and sell high.
        7. Always short some stocks no matter what the market sentiment. The object is not to outperform the market on the upside but to outperform the market on the downside.
        8. Do not put tight stops on your pos. Give at least 15% on the downside before you say goodbye. Placeing tight stops is a guaranteed receipe for loosing money big time. Most of your money will eaten up in commissions and the spread between bid and asked. If your afraid to loose $ don't invest. And if you are afraid, you will loose $.
        9. Almost everyone will loose in daytrading.
        10. Always sell at least half your pos in an equity if you have made a reasonable gain, >25% in 3-6 mo. Greed kills.
        Finally, no charge for this service.

      • And by the way merry Xmas or happy Hannukah and happy new year!

    • Mince,

      I'll pass on your consultation. Free advice can be very costly. Or were you also going to charge for your advice?

 
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