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Author: creativeexpress Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 766  
Subject: Trading versus investing Date: 7/15/2006 8:50 AM
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I guess that I do tend to view things differently for a host of reasons, but primarily because I do view money as an asset that can and should be worked. The market changes constantly on a minute by minute, hour by hour basis. During every day there are peaks and valleys with virtually every stock. Whether viewed as the second by second swings of the day traders or as broader swings of day to day, week to week, or even quarterly, the market constantly changes.

Unfortunately, far too many of the ups and downs of the analysts whose reactions drive the markets are purely based on emotion or hearsay. Sometimes, I believe software applications could better serve the economy by monitoring all key indicators and company accounting input to derive true worth and then send the anachronism of the wall street and other analyst home as they more often artificially drive stocks into tailspins based upon sound and fury signifying nothing. In fact, even at the level of the individual trader I believe that a real time software program that monitors the economy, the sectors, and the company data to effect instant trades based upon swings could do a better job than most analysts.

Checking this morning I find that my major "nestegg", the proverbial "golden egg" that I have had managed by a professional, certified account manager is very little changed since I began working with them two years ago. How many lost opportunities that that represent?

I thoroughly agree with the extreme caution one must take in listening to the advice of "those in the know". In fact, over the past week alone I noticed one saying buy AA, then not AA but AL, then get out of metals alll in the span of a week. The same has been true of their reflections upon which sectors provide safe harbor.

Personally, I stay away from those things I don't fully understand like shorts, longs, options, puts, calls and so much more. My initial approach was fairly simple in that I studied every stock (I do this full time)looking at the company, the industries(at 56 and with a lengthy career and degree in marketing I do know the markets), and the opinions of the analysts as relected on Yahoo, Etrade and other forums and then set alerts on My Yahoo both high and low. I also maintained a sizable list of stocks across a very diversified list of industries as this gave me a broader range from which to choose in watching the swings. Then, when a stock did rise or fall, as they all did day to day, I would sell at a particular percentage of increase.

My conundrum now is because I did follow the suggestions of the gurus and reduced my overall number of stocks while also purchasing those companies in sectors that were supposedly more stable or promised more growth during the current time. My mistakes were exacerbated by purchasing too soon after the alerts came in rather than giving the emotions of other readers, viewers or listeners time to allow the stocks to settle. Too, I mistakenly put too much into the individual stocks and ended up with too many shares of too few companies which limited my flexibility when the overall economy and industrys began to dive, dive, dive so that now I have to wait for the turn around. Keep in mind this has all occurred over a four week span. So, I was doing well with my initial approach, but when I changed it boxed me into a corner and now I either sell at a considerable loss or await a recovery that NOBODY seems to envision in the short term even though most of my stocks are "good" companies, so I allowed myself to be tranformed from a trader into an investor and you can't do both. No, investors cannot follow the same rules and practices and what works for investors will absolutely kill the results and options available for traders.

Is there a home for such short term traders at the FOOL?

I'm learning.
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Author: JeanDavid Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 762 of 766
Subject: Re: Trading versus investing Date: 7/15/2006 9:56 AM
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Is there a home for such short term traders at the FOOL?

Probably you could find one, or start your own board here somewhere.

Studies seem to show that the more frequently people trade their accounts, the more money their brokers make, but the less money they themselves make.

A well known investor, Mr. Warren Buffett, seems to think that if a stock is not worth owning for 10 years, it is not worth owning for 10 minutes.

Unfortunately, far too many of the ups and downs of the analysts whose reactions drive the markets are purely based on emotion or hearsay. Sometimes, I believe software applications could better serve the economy by monitoring all key indicators and company accounting input to derive true worth and then send the anachronism of the wall street and other analyst home as they more often artificially drive stocks into tailspins based upon sound and fury signifying nothing. In fact, even at the level of the individual trader I believe that a real time software program that monitors the economy, the sectors, and the company data to effect instant trades based upon swings could do a better job than most analysts.

The question I see implied here is "does monitoring all key indicators and company accounting input to derive true worth contain enough leading information (i.e., in time to use it) to actually make more money than doing fundamental analysis of the companies and investing in those that can be purchased with a sufficient margin of safety?" Because the data going into the hypothetical computer program is all trailing information by the time you get it to feed into the program. I.e., those better equipped to get these data than we are will have already acted on it.

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Author: tenshuma Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 763 of 766
Subject: Re: Trading versus investing Date: 9/2/2006 10:51 PM
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There are just as many rich traders as investors. In my mind, you don't invest in commodities for the long-term like you would with stocks.

Traders aren't investors. Traders trade to make money. Just because it's not worth owning doesn't mean it's not worth trading. There are some stocks like biotechs that have such great volatility that discerning traders could certainly make money.

Anyways, to the point.

Certainly for your account to be at the same-near level as it was two years ago is a poor reflection on the long-run philosophy and you should probably move your account.

You don't necessarily have to become a trader. Buy and hold still works.

-Ten

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Author: Cogitarius Big gold star, 5000 posts Old School Fool Home Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 764 of 766
Subject: Re: Trading versus investing Date: 9/11/2006 9:29 PM
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Ten : Just because it's not worth owning doesn't mean it's not worth trading

Nicely put! Not too many of us are able to dispassionately see both sides of the coin!



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Author: tenshuma Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 765 of 766
Subject: Re: Trading versus investing Date: 9/17/2006 11:17 AM
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;)

I think I've been seeing you around...somewhere...

-Ten

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