Post of the Day
March 13, 2000
Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light.
An Investor's Responsibilities
Evening from Tokyo, All,
It's been interesting reading over the messages of the past couple of days, and the debate raging about newbies, "appropriate" questions, censorship, etc. If I may, I'd like to add my own two yen here. Red wine, however, may require that I get to the point in a roundabout fashion, so I hope all will forgive.
(Incidentally, my comments are given in the framework of a LTB&H philosophy. Mo-mo players, traders and such need not continue.) Here are the posts that I'm seeing- not only here but on far too many boards- that frighten me:
"The stock has really been on a tear. Is it too late to get in?
"Should I buy before or after the split?"
"Will I get the split if I buy the day before (it splits)?
"I just bought ABCD, and have strapped myself in for this rocket ride. Will it start to move up again in the next week?"
"I just bought ABCD. Who are their competitors?
And the list goes on and on.
What frightens me is this: if an investor hasn't armed him/herself with the most basic information- what industry is the company in, what is its financial position, who are its competitors- what are they doing buying an equity? If, having been quick enough to find the Fool, they don't feel the need to check up for themselves what the mechanics of a split are, how much effort are they putting into their other research before making an investing decision?
It is the most basic requirement, no, that's not the right word- it is the most basic duty of any investor to arm one's self with the best possible information before investing a cent in the equity markets. This information can be obtained so very many places, and so easily, that it is nearly an act of willful ignorance not to take the advantages the internet (and the library, let's not forget) blesses the retail investor with and arm yourself.
May I suggest that one reason I was initially attracted to JDSU was this board? The messages were few each day, but filled with pertinent corporate news and overviews of technological advances. Everyone should click back a year ago to get a sense of how things were. I wrote virtually nothing, as writers like Frozencanuck, DirtyDingus, TallFool Victor "dominated" the conversation- not with multiple postings per day, but with the weight and thoughtfulness the put into each submission. Indeed, the stock was already moving powerfully by this time, but I never saw a single "Yeee-haaaaa!" post, a single "why didn't it move up today / why did it close at $XXX after $XXX intraday?"- type post.
Why? Because these gentlemen knew what they owned. To a LTB&H holder, these fleeting fluctuations are just that- fleeting.
Focus on the company and its industry's trends, not on the daily stock price.
Why do the post examples I gave at the beginning frighten me? Because they suggest people that are looking to make a buck in a hot market, without having to earn it by taking the time to learn what they're doing. These are some of the same folks that bought TGLO at $80 because "it's internet!". Some of these folks may have shorted RMBS becuse someone said "everyone's doing it". There have been a lot of people destroyed in the RMBS carnage, including a lot of "smart money" (sarcasm should drip here).
If you're a newbie reading this, all I want is for you to take responsibility for your investing decisions. That means clicking on the FAQ, if a board has one. That means following conversations for weeks or months- you'll be amazed many of your questions are answered, and how much ground is covered on a good board. Visit the website of the company you're researching. Call investor relations and get an investor's packet sent to you. Know what you own. You'll sleep better at night.
I hope this doesn't leave me seeming a colorless, humorless guy- I love a good joke as much as anyone. Let's all keep in mind why we visit here, though, and work to build each other's knowledge about this company, and the very dynamic industry it's in.
Sorry for such a long post. Time for another glass of red ;-)
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