Stop losses ...ASX

[wbosher]

Warren Buffett and Peter Lynch are in a completely different ballpark to most of us. Besides, I'm a trader, not an investor. Completely different tactics from what I understand from far more experienced traders than me.

If you see shares as part-ownership in a business then history tells us to buy shares in good companies when they're cheap. The stop-loss strategy encourages investors to sell when shares are cheap.

I'm not interested in owning a part of a company, I just want to ride a trend until it looks like it's weakening, and get out (hopefully with a profit), then move on to another.

[contrarianinvestor]

I'm a trader, not an investor. Completely different tactics from what I understand from far more experienced traders than me.

Ok. Do you believe that trading makes more money than long term investing? If so why and what techniques do you use?

[shasta]

Warren Buffett and Peter Lynch are in a completely different ballpark to most of us. Besides, I'm a trader, not an investor. Completely different tactics from what I understand from far more experienced traders than me.



I'm not interested in owning a part of a company, I just want to ride a trend until it looks like it's weakening, and get out (hopefully with a profit), then move on to another.

I can't see any point in referring to WB & the like.

Unless the thread was advocating buying & holding a stock for 10 years regardless, stop losses should be used, if not some other indicators should be, especially for traders.

We will never experience the same economic conditions that Warren Buffett had, so any comparison is pointless & meaningless.

People that supposedly follow Warren Buffett, may have held & riden the likes of NZX:NPX all the way down!

Thats not how you make money!

Stop losses got me out of PEM @ $4.56, & OZL @ $2.00 (best examples)

Phaedrus has said it many tinmes before, its not the best system, but its better than none.

[Lego_Man]

Im guessing its because of more frequent compounding periods.

If you buy and hold you only get the return from point A to point B.

However if you trade you can hold for smaller periods, making lots of smaller gains and (in theory) missing out on the declining periods during which a buy and hold strategy loses money.

[wbosher]

Wow, you guys are fast. I was trying to think of a way to word my reply when you guys did it for me.

However if you trade you can hold for smaller periods, making lots of smaller gains and (in theory) missing out on the declining periods during which a buy and hold strategy loses money.

This pretty much sums up my reason for trading rather than buy and hold.

Each to their own, I suppose...

[contrarianinvestor]

We will never experience the same economic conditions that Warren Buffett had

Can you explain?

[wbosher]

I can't see any point in referring to WB & the like.

Whats that supposed to mean?

[Lego_Man]

Can you explain?

Secular bull market?

@wbosher, shasta i believe was referring to Warren Buffett rather than you.

Anyway it's true, you can compare DIYers like us to Warren Buffett. He is almost a private equity man, he can take a big stake and actually have a lot more insight into the day-to-day goings on of the businesses he invests in.

[shasta]

Can you explain?

Over time the DOW would have to go up from 10,000 to over 100,000 to replicate the conditions Warren Buffett enjoyed.

As i said, we won't ever have these.

[wbosher]

@wbosher, shasta i believe was referring to Warren Buffett rather than you.

Oops. :o