GTP - Great Southern Plantations

[pch]

Hello pch
Fundamentals show GTP to be a sound company which has had to weather the past problems of government changing the rules regarding managed investment schemes' tax deductibility. Once an idea of uncertainty re tax considerations has anchored itself in potential investors' minds, it takes a while to be reversed after government has offered reassurance of the ongoing tax deductibility.

I'm also less than convinced as to the viability of the sort of diversification GTP has engaged in - grapes and olives etc. Even the subliminal awareness of the present grape glut will tend to register in investor's minds as "why are they doing this?" GTP's response to that is that by the time their vines are ready for harvest there will once again be a shortage of wine grapes.
We will see.

Julia
(

Bang on the money on both counts.. Add to that the income tax thresholds changing making the tax benefits less attractive than previously and the threat of being charged a lot more for water use.. But the fact that they *own* the land they develop on, and are probably a couple financial years off being able to issue much less debt to fund land aquisition through harvestring and reuse, makes me feel okay about them..

 

[bunyip]

Hi Julia

It doesn't surprise me that three brokers are recommending a downtrending stock......they're good at doing that sort of thing! I wonder if they're recommending any uptrending stocks???
Brokers are crooks in my opinion - they're not above blatant dishonesty if the occasion requires it. I know this for a fact, having spoken to a couple of former brokers who gave me the inside story about what goes on in the broking world.
For example, an institutional client is holding a large block of stock in a company that's going through a tough patch, and it's share price is suffering accordingly.
The insto contacts the broking firm and says "Listen - we're holding all these shares in this company and we want to get out of them, but not at these prices. How about talking the company up for us so we can quit our holdings at a better price".
The broking firm says "No problem, leave it to us". They slap a buy recommendation on the stock and make up some rosy story about the company's future prospects.
Then they email it to thousands of their clients, many of whom swallow the bait and race in and buy the stock. Up it goes for a few days or maybe a week or more until the insto, with a big smile on it's face, dumps it's position and forces the price down again.
Its a win win situation for the broking firm......they pick up a bunch of nice commissions and they're even made to look good by the fact that the share price did actually rise, even though the rise was probably too small and too short-lived to enable many of their clients to profit from it.

Another thing that former brokers have told me is that employees within broking firms are instructed by their firm with regard to what recommendations to make. The employee can find himself in a situation of being forced to give a buy recommendation that he personally disagrees with.

A speaker at an ATAA meeting once claimed that National Australia Bank pays several million dollars a year to a particular broking firm to say positive things about NAB.
I had no way of knowing whether or not this was true, however one of the former brokers I spoke to confirmed that this sort of bribery does in fact go on between brokers and corporations.
Anyway, the long and short of it is that you can't rely on brokers to give you honest or intelligent recommendations. I'd trust a funnelweb spider in my sleeping bag before I'd trust a broker!

As a fundamentalist yourself Julia, you can adopt three simple technical rules that will greatly increase the effectiveness of your fundamentally based buy decisions, while at the same time steering you clear of dodgy calls from incompetent and/or dishonest brokers. Regardless of how great the fundamenatls look, the three rules you should never deviate from are......
1. If its drifting sideways on the chart, I'm not touching it.
2. If its heading south east on the chart, I'm not touching it.
3. If its heading north east on the chart, I'll consider buying it if the fundamentals stack up OK.

Cheers
Bunyip

 

[Ann]

Hi GP, thansk for the charts

Btw based on TA, what do u think the price of GTP is likely to head to given that it broke the $4 barrier recently?

thx

MS

Hi Michael,

Forgive me butting in but may I offer my thoughts with a bit of TA?

 

[Julia]

Hi Bunyip,

Wouldn't disagree with your view about brokers for a heartbeat! I learned the hard way.

Your three golden rules make complete sense and suit my need for simplicity.

This has been a really useful exchange for me.

With thanks and good wishes.

Julia

PS The dreaded FWD is up 14c today. Sorry for putting this on the GTP thread but it's follow-on from a previous post by Bunyip.

 

[abucs]

Each to his own Bunyip.

I'm up over $300K on GTP and i find i make the biggest profits on stocks heading south such as GTP below $1, or such as Aristocrat, or even stocks about to jump such as Jumbo buy at 2.1c to sell at 8.4c last year. It only works if you have a correct view of how much a stock is really worth. Of course that is a little more difficult than observing which way a line is going.

PCH, yes i think it's a good time to pick up land. The thing with GTP though is that much of what it does is for the long term. Although good, this can lead to price volatilty with people jumping in and out of the stock following after quick returns. As mentioned before, i'm wanting the grapes, olives and cattle products to do well to increase cashflow and underpin dividend increases that will reduce that volatility.

 

[bunyip]

Abucs

A 300k gain is a great result if your initial investment was 100k, but not so good if you invested 2 million.
The true measure of performance is return on invested capital. Also, the length of time taken to achieve that return must be taken into account.
I'd be interested in knowing what percentage gain you've got so far on your GTP investment, and how long its taken you to get it.
Of course, this is your business, not mine, and I understand if you'd prefer to keep that information to yourself.

As you've said, each to his own............fortunately we don't all trade the same way, otherwise there'd be no buyers when we want to sell, and no sellers when we want to buy.

Bunyip

 

[abucs]

Great Southern Plantations

Bunyip, my first investment in GTP was in 2001, when i first started investing in the stock market.

I added to that over the next 3 years to $70K in total, with prices of 63c to $2.31.

In the last year i have put quite a lot more in at prices of $2.77 to $3.70, most of which i intend to sell over the next 12 months if GTP approaches my valuations.

Not saying TA doesn't work or is not an important tool. Just agreeing with you that there are other ways.

Good luck.

 

[bunyip]

Abucs

I'm still none the wiser about how much money you've invested in GTP, and what percentage gain you've made on your investment over what time period.
But anyway, I think we can reasonably assume that you've done quite well and you're more than happy with your results.
You started investing in the stockmarket just 5 years ago. Since you're relatively new to the game, I feel there are a couple of things you should be aware of. (perrhaps you already are aware of them).

First.....We're been in a bull market for the last three years. Not just any bull market either - the last three years have been probably the best period in the history of the stockmarket. The performance of an investment strategy must be assessed on how it performs overall, in good times and bad. A fundamentally based buy and hold strategy that uses 'fair valuation' as it's main criteria might perform very well during a bull market, but result in you getting badly mauled during a bear market.

Second....There's a lot of 'lost opportunity' cost in holding a stock for months or years, including lengthy periods when it performs poorly. While your stock is heading south for prolonged periods of time, your money could have been deployed in a bullish stock that would have given you big returns.

Third...You've stated that you'll unload most of your GTP holdings over the next 12 months if it approaches your valuations. The potential flaw in your plan is that it may not get to or near your valuations. What then? Hold it for another couple of years, even though it may fall away severely again? And while you're holding a non performer, miss out on some great profit opportunities in other stocks?
I'm not saying this is what will happen, but you need to be aware of the possibilities and the potential consequences.

As a comparison with your investment approach, you might be interested in taking a look at what was achievable by using a simple technical analysis approach to trading GTP over the last few years.

You said you first started investing in GTP in 2001. GTP was mostly bearish that year. Maybe you began buying after October 2001 when the stock had bottomed out and begun a new uptrend. Then again, maybe you started buying earlier in the year when the stock was plunging south. In which case I daresay you'd have been grinding your teeth and wondering if you'd made a mistake as you watched the value of your investment evaporating.

GTP in 2001 was a technical trader's dream. It could have been sold short using CFD's or put options, and the profit would have been impressive as the stock shed more than two thirds of it's value.

Between August 01 and April 02, a new uptrend offered the nimble footed market technician an opportunity to roughly double his money with a simplistic technical strategy of buying the dips and using a trailing stop exit strategy.

GTP put in a monster uptrend from May 03 to February 05. Working entirely from weekly charts, a trend trading approach based on pure technical analysis would have signalled an entry from the first pullback somewhere around $1.10 in late July 2003, and a trailing stop would have closed the position at around $3.97 in March 05.
In other words an investment of 100k could have been turned into 340k in about 19 months.

This year GTP has presented the opportunity for a 30% gain so far simply by woking from a weekly chart and buying the first dip in the new uptrend.

I could give you other examples of how a pure TA approach has offered excellent profit opportunities, but I'm sure you're getting the picture.

The technical approach offers many advantages over a fundamenatally based 'buy and hold' approach......

*You can avoid tying up your capital for months or years in a non performing stock.
*You can redeploy your funds into a high performing stock once you quit your holdings in a non performer.
*You can sell short or buy put options to take advantge of the profit opportunities that arise in bearish stocks/markets.
*You are not at the mercy of a bear market......a skilled technical trader makes good money in a bear market while most other investors cop a mauling.

The above examples of using a technical approach to trade GTP are based on one of the simplest and most effective of all technical analysis strategies.....
1. Wait for a new trend to begin.
2. Buy the first dip in the new trend. (or short the first rally in a downtrend)
3. Trail the stop until you're taken out of the trade.

Technical analysis frightens a lot of people due to it's perceived complexity - but it really can be as simple and effective as I've outlined above.
Technical analysts themselves tend to give technical analysis a bad name by making it unnecessarily complex, trying to use too many techniques, focusing too much on fancy indicators while paying too little attention to the direction of the trend and the price patterns within the trend.

I'm not bagging fundamental analysis. In fact I use it myself by only buying stocks that appear to have decent fundamentals and only shorting those that appear to have weak fundamentals. Its just that I use trend identification as my way of forming a view of the fundamentals, rather than the more conventional and time-consuming practice of reading the financial pages, poring over company reports and brokers newsletters, trying to estimate fair value, etc etc.
The fatal flaw I see in fundamental analysis is that it lacks a timing component. It tells you what to buy, but not when to buy and when to sell. Consequently a lot of investors lose a lot of money by sinking their funds into a 'great' stock that's plunging southward, is likely to plunge a lot further, and may not come back up for years, if ever.

I'm well aware that TA is not for everyone. Depends on your personality I guess - each to his own. Each trader/investor must find what works for him or her, then stick with it.

Bunyip

 

[abucs]

Hello Bunyip, i think it depends on what you are wanting.

I am in my 30's and want to invest for a living and spend my time travelling and not needing to work. Something i have started moving to in the last year and intend to fully complete in the next year or so.

In my mind you need a certain guaranteed income (dividends) that will be able to fund this. The rest of your funds can be used for short term plays as you have mentioned. (Although i still favour long term fundamentals).

Say you had 500,000 shares in GTP (which i don't) this would give you a dividend income of $100,000 before tax with the reasonable expectation that there would be a 30c dividend ($214,000 before tax) in 5 to 6 years time.

In which case the ups and downs you refer to don't mean so much if the dividends are important and you have confidence in the company long term. And with GTP, i am confident and it is one of the companies i hold for those dividends.

I started with zero dollars five years ago and now have a dividend stream of well over $100K per year with GTP being a minor part of that (although i expect it to grow). In the next 2-3 years i am expecting the dividend stream to be about $200K (mostly from increased divs from other stocks) and most of my stocks have PE's of less than 10 and generate strong earnings that should weather a downturn in sentiment.

Yes, GTP may not reach my valuations and i am prepared to make a decision one way or the other when the time comes. But my valuations will form part of my decision on what to do if that is the case.

You mention above that TA can be like the lazy mans fundamentals and say that if the fundamentalists are buying or selling then this is a good sign to you on where a stock is heading. I agree and think this makes a lot of sense. I simply aim to be one of the fundamentalists that create those trends. If i am right with GTP then i will be one of the fundamentalists that may create the next downtrend for GTP.

With expected increased personal cashflow in the next couple of years i'm sure i will take an interest in TA for some short term plays (for fun) and am interested in reading your experienced comments.

My majority holding in GTP though is for current and expected dividends and i would only sell out of that if it far exceeded my valuations. (Which is possible).

 

[abucs]

With poring over annual reports, i love doing that as i love to continually learn what is happening in the world. Although it is time consuming (fair enough) and most of them end up in the bin. I think it is fascinating though reading about different industries. The thing i like about stocks is that it is always an education. And that education will help in the future.

A bank will always basically be a bank and learning about them now will help 20 years from now.

In contrast to a three year old filly that likes the wet at Randwick that won't even be running in four years time.

With reading papers and brokers comments, sure i like to read them but as you have mentioned above, they may not always be the truth, the whole truth and nothing but the truth.

 

[bunyip]

Abucs

You make some good points. Certainly there is great benefit in an investment style that produces steady income year in year out, such as that produced by dividends. In fact I have some long term holdings myself, one of which is NAB. Bought it about 10 years ago for a shade over $11. It was paying 7% fully franked at the time, so its been worth holding just for the dividends alone, irrespective of the what the share price has done during the time I've been holding it.

In the last few years I've gone increasingly down the technical analysis road, although not necessarily short term. A trend trading approach sticks with the trade while the trend remains favourable, which in some stocks could be years. In this case, a technical approach becomes at the same time an income producing approach if the stock pays a decent dividend.
Of course TA also caters for the short termer who likes the constant turnover and small but regular profits that can be produced by swing trading, where a few days to a couple of weeks is a common holding time for a trade.

One point to keep in mind is that a TA approach to investing doesn't have to be time consuming. Working from weekly charts means a TA trader can follow hundreds of stocks in just an hour or two each weekend - particularly if he uses TA software that can scan for his preferred setups.
With today's technology - laptops, mobile phones etc, he could be travelling the world and still be in a position to download his data and do his analysis each weekend, place his orders, adjust his stops on existing positions and so on. All in just a couple of hours once a week.

Thanks for your input into our discussion. This has been a great thread, even if I've been guilty of steering it off topic to some extent.

Cheers, and continued success with your fundamental approach.

Bunyip

 

[Julia]

I've been following this thread with interest and note the contrast in the exchange of views between the participants, notably abucs and bunyip, with that of the main players in other threads. No particular ego trips, but rather a thoughtful and considered exchange between two people whose views may not after all be as far apart as first appeared. Civilised and constructive.

Abucs, if you've created a capital base capable of generating $100,000 - $200,000 in dividends from nothing in five years, congratulations. Good for you.

Bunyip, your point about the lengthy "downtime" with GTP (which of course applies to other stocks) is really well made. It may well be trending up nicely again at present, but the question of what else the money could have been doing while it languished for almost the past year is something which I've been very conscious of.
Abucs, is this something which you considered during the last year?

Bunyip again, if one were to pull funds out of non-defensive stocks during a bear market yet was not comfortable with short selling or using puts, what would be your suggestion as to what to do with the funds in the meantime?
Just leave it in cash?

Julia

 

[pch]

Heh, in my case (I subscribe to Abucs view but I also read what Bunyip said with great interest). I bought $10k of Woodside at $11 and held it for some 6 months and concluded it should have 'come good' by then and sold it for $12ish as I thought that I could do better elsewhere.. duuhh me

Thus I decided that as soon as I sell the market will immediately pick up and that stock will be 'discovered' (Peter Lynch of 'One up on Wall St' fame had a term for it that I forget now..)

I don't know about you guys but I am geared so I was simply paying the interest on the original purchase via line of credit (no margin loan and no margin calls) and after tax writeoff and dividends broke even cashflow wise.. so if it took a year to recover, it didn't bother me much as I wasn't actually losing.. Plus after gaining from $1, going from $5 to under $3 was annoying, but you can't say its been exactly a bad return..

 

[bunyip]

Greetings Julia

Regarding what to do with your money if you pull it out of the market for a time.....there are probably others on this forum who are better qualified to comment than I am.
Because I'm just as comfortable playing the short side of the market as the long side, my funds tend to be gainfully employed regardless of market conditions.
We don't know when a market will change from bearish back to bullish, so you'd want to make sure you have ready access to your funds as soon as market conditions are more to your liking. An 'on call' term deposit would be one way to ensure you can get your hands on your money any time you want.

However, my first suggestion is that you make it your business to learn how to sell short so you're comfortable playing both sides of the market.
The bear market of 2002 presented loads of opportunities to profit from selling short - the next bear market will be no different. Be a shame to miss out on making some decent money simply because you lack the knowledge and confidence to play the short side. Not only that, but there's a fair bit of personal satisfaction in making regular profits under market conditions that are causing the masses to moan about how much money they're losing and how difficult trading is under these conditions!

CFD's make it just as easy to sell short as to go long. And with CFD's you get paid interest on your short positions - not very much interest mind you, but its better than a poke in the eye with a sharp stick!
I suggest opening an account with a CFD broker such as CMC Markets or IG Markets, and funding it was just a few hundred dollars. Then find yourself a bearish stock and start having a play. Wait for the bearish stock to rally for a few days, then put in a bearish candle that suggests the rally is finished and the downtrend has resumed. Place a sell stop entry order a few ticks under the bearish candle, and an 'if done' stop loss order a few ticks above the high of the rally. You can short as small a position as you want, and at $10 (with CMC) the commission isn't going to kill you. You can keep doing this over and over again with very small amounts of money until you start feeling comfortable with selling short.
You need charting software to follow this approach..... CFD brokers provide free charting software as part of the deal when you use their online trading platform.

However if after giving it a fair sort of a trial you decide that short selling is definitely not for you, then a bear market may still offer some profitable buying opportunities if you can find a bullish sector.
One of my mentors, Dave Landry, expresses the view that sector direction is more important than overall market direction. Supporting this view is that fact that while the US market was flat for the last couple of years, there were still some bullish sectors - e.g. Energy - that offered great trading opportunites in very bullish stocks.
Personally I prefer not to go against the overall market direction. Bull markets are best traded from the long side, and bear markets from the short side.
As for a sideways market, there are usually opportunites to buy bullish stocks in bullish sectors and to short bearish stocks in bearish sectors.

At the risk of sounding repetitive I'll again mention Stan Weinstein's excellent book 'Secrets For Profiting In Bull And Bear Markets'......it contains a 50 page chapter about selling short.

Cheers
Bunyip

 

[abucs]

Well done with NAB Bunyip, that looks like a great investment. Looking forward to more of your posts.

Julia, it didn't feel so good as GTP was dropping and then going sideways.
That year though i was busy selling growth stocks and buying into dividend stocks to have that income producing base. So after redoing the calculations i held on and then started a margin loan to buy more. As pch mentions, you have to service the loan and thus the returns are affected by this. I'm a little wary of debt and that is why i am happy in treating that money a little differently and will sell out at a cheaper price than my majority holding.
After having the income producing base i may be more open to selling on a downtrend. I still think though that the best plays are to find something like NAB and just enjoy the ride.

pch, it looks like you are good at picking stocks. Perhaps it just takes a little while for the rest of us to catch up with you. )

 

[pch]

pch, it looks like you are good at picking stocks. Perhaps it just takes a little while for the rest of us to catch up with you. )

Hahaha! No I was lucky and in a bull market! I have uttely no faith in my own abilities. Being a contrarian investor, you are basically doing an exercise in polishing turds and often no matter how much you polish they are still turds..

Your waaaay ahread of me in returns by light years. I have about a years income if I cashed out tomorrow..

 

[RichKid]

.....................
One of my mentors, Dave Landry, expresses the view that sector direction is more important than overall market direction. Supporting this view is that fact that while the US market was flat for the last couple of years, there were still some bullish sectors - e.g. Energy - that offered great trading opportunites in very bullish stocks.
Personally I prefer not to go against the overall market direction. Bull markets are best traded from the long side, and bear markets from the short side.
As for a sideways market, there are usually opportunites to buy bullish stocks in bullish sectors and to short bearish stocks in bearish sectors.....

Just some thoughts:
If you were to take Landry's view a step further, following the logic, you could also discount sector direction too as some stocks in the sector will be going in the opposite direction to the sector (eg BSL v OST atm). So then you concentrate on the trend of the stock only. Sometimes by the time you see the sector move it's too late, just as with any other trend. Often the stock will be going up for the same reasons the sector is going up so it helps to know why at times.

I like the emphasis on trend following- ie go long when the market is long and vice versa. Some long term technical investors think they are contrarians when they buy on short term dips in overall long term uptrends. They are still buying into an uptrending stock.

Your recent posts are like TA v fundamentals in a nutshell, great work Bunyip!

 

[TheAnalyst]

recent trades.....not all of em as i have done a couple of hundred this year but watching and waiting to get GTP again.

GTPIZK 27/03/06 10:51 320389 Sell 10000 1.68 16,770.30 Filled
GTPIZK 27/03/06 10:51 320389 Sell 10000 1.68 16,770.30 SEATS Entered
GTPIZK 27/03/06 10:51 320389 Sell 10000 1.68 16,770.30 New Request
GTPIZK 16/03/06 10:42 318092 Buy 10000 1.48 14,829.70 Filled
GTPIZK 16/03/06 10:42 318092 Buy 10000 1.48 14,829.70 SEATS Entered
GTPIZK 16/03/06 10:42 318092 Buy 10000 1.48 14,829.70
New Request


WBCIM5 29/03/06 14:51 321583 Sell 5000 3.27 16,320.30 Filled
WBCIM5 29/03/06 14:51 321583 Sell 5000 3.27 16,320.30 SEATS Entered
WBCIM5 29/03/06 14:51 321583 Sell 5000 3.27 16,320.30 New Request
WBCIM5 29/03/06 13:44 321539 Buy 5000 3.30 16,529.70 Filled
WBCIM5 29/03/06 13:44 321539 Buy 5000 3.30 16,529.70 SEATS Entered
WBCIM5 29/03/06 13:44 321539 Buy 5000 3.30 16,529.70 New Request

ANZIMP 29/03/06 13:01 321511 Sell 4500 3.76 16,925.20 Filled
ANZIMP 29/03/06 13:01 321511 Sell 2000 3.76 16,925.20 SEATS Amended
ANZIMP 29/03/06 13:01 321511 Sell 2000 3.76 16,925.20 Amend Request
ANZIMP 29/03/06 12:54 321511 Sell 2500 3.77 16,935.30 Partially Filled
ANZIMP 29/03/06 12:54 321511 Sell 4500 3.77 16,935.30 SEATS Entered
ANZIMP 29/03/06 12:54 321511 Sell 4500 3.77 16,935.30 New Request
ANZIMP 29/03/06 11:35 321442 Sell 4500 3.79 17,025.30 Cancelled
ANZIMP 29/03/06 11:35 321442 Sell 4500 3.79 17,025.30 Cancel Request
ANZIMP 29/03/06 11:34 321442 Sell 4500 3.79 17,025.30 SEATS Amended
ANZIMP 29/03/06 11:34 321442 Sell 4500 3.79 17,025.30 Amend Request

ANZIMP 29/03/06 11:32 321442 Sell 4500 3.80 17,070.30 SEATS Entered

ANZIMP 29/03/06 11:32 321442 Sell 4500 3.80 17,070.30 New Request

ANZIMP 29/03/06 10:02 321295 Buy 4500 3.71 16,724.70 Filled

ANZIMP 29/03/06 10:02 321295 Buy 4500 3.71 16,724.70 SEATS Entered

ANZIMP 29/03/06 10:02 321295 Buy 4500 3.71 16,724.70 New Request

ANZIMP 28/03/06 12:15 321001 Sell 5000 3.92 19,610.30 Filled

ANZIMP 28/03/06 12:14 321001 Sell 4000 3.93 19,610.30 Partially Filled

ANZIMP 28/03/06 12:14 321001 Sell 5000 3.92 19,570.30 SEATS Entered

ANZIMP 28/03/06 12:14 321001 Sell 5000 3.92 19,570.30 New Request

ANZIMP 28/03/06 10:37 320885 Buy 5000 3.65 18,279.70 Filled

ANZIMP 28/03/06 10:37 320885 Buy 5000 3.65 18,279.70 SEATS Entered

ANZIMP 28/03/06 10:37 320885 Buy 5000 3.65 18,279.70 New Request

 

[bunyip]

Hi Richkid


My mates and I were keen pig hunters when we were in our teens and early twenties. Our first couple of pig hunts were unsuccessful......we spent all day walking around dry bushland but didn't see a single pig. After that we realised we had to choose our hunting grounds more carefully. Pigs love grain, mud and water, and low bushy cover to hide in during the day. So we got permission to hunt on properties that grew grain, and had scrubby creeks and swamps nearby. Our pig hunts became successful from then on, simply because we carefully chose our hunting ground.

The value of sector analysis is that it helps you to find the best hunting grounds in which to look for good stocks to trade. Sure there are some stocks running contrary to their sector, but most will be running with the sector - you trade the ones that are trending in harmony with their sector and you ignore those that are not.

In the last couple of years the US market has been pretty flat and would have frustrated many traders. But sector analysis allowed switched on traders to zero in on the hunting grounds (sectors) that were outperforming the general market. Energy was one of those sectors.....most of the US Energy stocks offered superb trading opportunities.

Perhaps technical analysis seems to be at odds with fundamentals analysis, but its not really. Technical analysis starts with trend identification - this is in effect a form of fundamental analysis, since trends are caused primarily by fundamentals.

Cheers
Bunyip

 

[RichKid]

.....
I like the emphasis on trend following- ie go long when the market is long and vice versa. Some long term technical investors think they are contrarians when they buy on short term dips in overall long term uptrends. They are still buying into an uptrending stock.

Your recent posts are like TA v fundamentals in a nutshell, great work Bunyip!

Prefer not to quote myself but I missed something which you mentioned earlier Bunyip. In relation to buying downtrending stocks (or 'dips')- some fundamental investors would have 'timed' the buy (ie buy once the stock came down to their valuation price or fell to an undervalue), they may also time the exit once it becomes 'overvalued' whatever that may be. Where the market agrees with them they well buy at the same time as us technicians do. They may then achieve the same outcome as us technicians or better (ie lower trade costs, tax benefits, dividends etc).

When fundamentals people just buy and pray come hell or highwater (that is the stereotype/caricuture of the fundamentals investor) you are in big trouble as anything can happen as there is an untested assumption that the stocks have to go up- you are stuck in it, opportunity cost and all that.

So if the fundamentals investor has a plan (that they have tested and know to work, eg by looking at past economic/financial history for various co's/markets) then they can do well. Many people make money in many different ways. We are all lookig to benefit from patterns (eg patterns in EPS, Profit or Div Yld) and trends in some way or another imo as that provides a method .

Maybe we should move this stuff to a new thread??