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Subject:  Re: Zeke's risk/reward table Date:  1/9/2000  10:22 PM
Author:  Rubic Number:  5140 of 8329

LanceMan wrote:
1) The risk that you will lose a significant portion of your investment.

Any portion is significant to me. <0.2 wink>

2) The risk that your investment will underperform the market. Just because a stock is deemed to be "undervalued" doesn't mean that the market will ever change its attitude towards that stock in the near future.

I'm not sure if I should be concerned with how the market values my stock in the near future. After all I'm a part owner of the business, not a fund manager. <0.5 wink>

In fact, if I've found a company that has been (and continues to be) undervalued by the market then the advantage would seem to be mine.

Now, I buy into the Rule Maker idea of investing, and have owned a couple of Rule Maker stocks long before I ever heard of the term.

But I disagree with splitting risk into two different meanings and then penalizing a value strategy for limiting the downside potential of a permanent loss of capital. Zeke already included a REWARD column in his table. I don't think it's necessary mix the semantics. Or should we lower the Rule Breaker REWARD to account for increased RISK?

Best regards and thanks for your reply,


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