19 May 2006

Timing Profit Taking Corrections

Kitco - Exclusive Commentaries - Roger Wiegand: "Investors and traders would prefer to buy something and have it rally forever. This simply cannot happen as human nature says take profits when you see them. Further, outside mitigating circumstances often thrust themselves onto markets disrupting things prematurely. These confusing market moving events can make big trouble as large accounts are quicker to invest and slower to exit. Some large investors are critical of little traders as their perspectives do not match. The big boys don’t need the cash and are in for the long pull with a primary objective of retaining capital and protecting it as opposed to the secondary objective of earning more. The smaller traders are striving and straining to maximize earnings so they are busy swing trading, day trading and holding only a partial core position for the longer term in favorite quality stocks. Both sides say they are right with others being wrong. In reality, both sides are right but only at certain times. One dyed-in-the-wool buy–and-hold-forever investor scoffed at this when discussing timing ideas with a Chicago screen trader. “He said, you couldn’t possibly make money doing that.” The screen trader laughed and replied, “Want to see my fleet of Mercedes cars in my new mansion garage?”
We have a reverent adulation for the achievements of Warren Buffet who is now 75 years old and still investing. However, in our view, trading and investing circumstances are radically changed from Warren’s lengthly adult market experience. The difference now is the United States of America is no longer as market friendly and lightening fast computers have the trading world wired for incredible speed; not only in the States but in all advanced investing societies.
We understand the values of compound interest, and allowing stocks e"

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