vacca@burdvax.UUCP (08/22/84)
Is anyone familiar with two companies that I am potentially
interested in investing in? They are NBI and Medtronics. I have
heard some good things about them but I'd like to have some
confirmation on it.
-David Vaccares@ihuxn.UUCP (Rich Strebendt) (08/24/84)
Re: | Is anyone familiar with two companies that I am potentially | interested in investing in? They are NBI and Medtronics. I have | heard some good things about them but I'd like to have some | confirmation on it. | | -David Vacca Observation: Any company you "have heard some good things about" is probably a poor investment choice. This is because the company has gotten enough interest from investors that the price is no longer at the bargain level. The trick is to find a good company that NO ONE is interested in ... yet. When investors "discover" your stock, then you sell to the suckers and find another such company. Rich Strebendt ...!ihnp4!ihuxn!res
brett@ucla-cs.UUCP (08/26/84)
> Observation: Any company you "have heard some good things about" is > probably a poor investment choice. This is because the company has > gotten enough interest from investors that the price is no longer at > the bargain level. The trick is to find a good company that NO ONE is > interested in ... yet. When investors "discover" your stock, then you > sell to the suckers and find another such company. > > Rich Strebendt > ...!ihnp4!ihuxn!res Although that basic form of this statement "buy low, sell high" is sound, there are problems with this logic. > Observation: Any company you "have heard some good things about" is > probably a poor investment choice. is ridiculous. If this statement were true basically no one would buy stocks on the NYSE. People would see good news go buy on the DJNews service and would say "oh, I shouldnt buy that stock...I've now heard good news about it". But that isn't the way things work. Even if you are a trader, you may want to buy on good news, or sell on good news. There's very little rationale behind the way the market acts sometimes. Most money in the stock market is made on sound stocks, with bright prospects. > This is because the company has gotten enough interest > from investors that the price is no longer at the bargain level. Not true. Interest in a stock may not be correlated to amount of stock held by investors or traders. What this means is that Martin Zweig may be interested in the stock, for example, but may not recommend its purchase. He will tell you that at times... "it's a bit toppy now"...."or wait till it comes down a bit". What is a bargain for some, may not be a bargain for others. At other times there may be alot of interest in the stock, but the price may be depressed because no one is buying it. Such depressions are shorted lived (but may be taken advantage of) as technicians/clients purchase the stock and its price changes. Oil companies are often undervalued, as the value of their reserves i.e. liquidation value, may be much more than the current value of their stock. These are often at "bargain level" according to pure liquidation value. The fact of the matter, in summary, is that you don't have to catch the tops or bottoms to get rich. You DO have to catch the basic flow (up or down movement). So buying at the bargain level isn't as important as catching major swings in the change of a stock's price. > The trick is to find a good company that NO ONE is interested in ... yet. Don't beleive it. Most money is made in the stock market on sound stocks with bright prospects. This type of buying, called speculating, can lead one into the depths of financial ruin. -- Brett Fleisch University of California Los Angeles 3804 Boelter Hall Los Angeles, CA 90024 Phone: 474-5317 brett@ucla-cs.ARPA or ...!{cepu, ihnp4, trwspp, ucbvax}!ucla-cs!brett -------------------------------------------------------------------------
res@ihuxn.UUCP (Rich Strebendt) (08/30/84)
Responding to a response to a reply I posted: | Although that basic form of this statement "buy low, sell high" is | sound, there are problems with this logic. | | > Observation: Any company you "have heard some good things about" is | > probably a poor investment choice. | | is ridiculous. If this statement were true basically no one would | buy stocks on the NYSE. People would see good news go buy on the | DJNews service and would say "oh, I shouldnt buy that stock...I've | now heard good news about it". But that isn't the way things work. | Even if you are a trader, you may want to buy on good news, or | sell on good news. My comments were aimed at the small individual investor. By the time a small investor sees the good news, calls his/her broker to order the transaction, and the order is filled on the floor of the stock exchange, the larger professional investors (who spend their lives gathering such information and acting on it with a speed that the small individual cannot match) have long ago made their purchases and driven the price of the stock up. Along comes the small investor and buys at the newly inflated price. The best time for the small investor to buy is on BAD news, when the large investors are bailing out and driving the price down regardless of the long-term outlook for the stock. Then you want to sell it on the GOOD news when the big investors are again interested in it. | There's very little rationale behind the way the | market acts sometimes. Most money in the stock market is made on | sound stocks, with bright prospects. Agreed! Except, that if you want to buy such a stock at a bargain (profit making) price, you want to buy it after an overreaction to bad news. I would maintain that the bulk of trades in the stock market are made IRRATIONALLY as a result of EMOTIONAL REACTION or over-reaction. For example, can anyone find any rhyme or reason to the behavior of the market over the past year. The line comes to mind from the song "... fools give you reasons, wise men never try." | The fact of the matter, in summary, is that you don't have | to catch the tops or bottoms to get rich. You DO have to catch | the basic flow (up or down movement). So buying at the | bargain level isn't as important as catching major swings in | the change of a stock's price. Agreed. My emphasis on "bargains" is really intended to reflect the observation that one does not make money by buying a stock which has reached its peak and is on the way down. Perhaps the word "profitable" would be a better choice for my meanings. | > The trick is to find a good company that NO ONE is interested in ... yet. | | Don't beleive it. Most money is made in the stock market on sound | stocks with bright prospects. This type of buying, called speculating, | can lead one into the depths of financial ruin. I agree that what one must look for is a stock that has good prospects. That stock has to be for a company which is well managed and has a good position in its markets. Note that BOTH of us are using the word "prospects." I use this word to mean that the outlook for the company is good despite a current depression of the price of the company's stock. I do NOT believe in blind speculation ... which is what I regard buying a stock because "I have heard some good things about it" at a cocktail party or in the john. If that is one's approach to investing, then I would recommend giving the money instead to the United Way - they need it more than the big investor you will be giving it to. What I DO believe in is identifying a GOOD company whose stock price is depressed for no good reason (not companies in trouble) and buying this stock before the rest of the market re-discovers it and boosts its price to its true value or above. As an example, during the economic difficulties of a couple of years ago I bought stock in some companies related to building construction. Because of the economic conditions the prices of these stocks were depressed. When the economy turned back up, SURPRIZE, the market "discovered" them and their prices rose. At that point I sold and went looking for something else. I do not believe that one can invest seriously without doing a bit of homework. One has to identify good investment prospects based on many criteria and evaluate the quality of the company as well as the price of its stock. One criterion that I have found is a very POOR one, indeed, a negative one, is current positive publicity - it indicates to me that the investing opportunity is PAST except to the Institutional investors who were reacting to the news long before I ever saw it. Another negative criterion is hearing about the stock at a party - this indicates that the investment opportunity is LOOOOOOOOOONG past. Indeed, if I start to hear good news about a company whose stock I own I start keeping very close track of its price, as I expect to be able to sell profitably very soon. Rich Strebendt ...!ihnp4!ihuxn!res