recieved an email from mihal , page-43

Toll ,here is a part of one of my earlier posts .


"it is only with hind sight that we can see that we could have made money somewhere else, while we sit in a stock that has gone sideways .

Some will say they have learned some kind of lesson ,but the honest truth is that such lessons are imaginary ,and none of us will know what will happen with our next purchase either .
No one really knows until after it plays out .It is just as likely that you can jump out and into a stock that goes down faster .Anyone here done that ?

You will see what I mean once you have learnt your 20th lesson . The best you can hope for in this game is to refine your trading plan to increase your odds .
My trading plan revolves around targetting mispriced companies ,and waiting for the rerating."



"Mistakes" in trading are things that you know that can be avoided from the outset ,not something you can only "know" in hindsight .

When a stock doesnt do what you hoped for in a certain time frame ,it isnt necessarily a mistake .Its all about percentages .Nobody can pick 100% ,and nobody can time perfectly .You may have been lucky enough to jump out ,and into another stock and made good gains .
But if for example ,you jumped into PEN which was looking great at 14c .Then within the blink of an eye it hit 6c due to dramas caused by a natural disaster .
Nobody can call it a mistake .It was a calculated risk ,like every other stock decision we make .

True trading mistakes are really things like not understanding the company and the business ,or the risk before entering .
Another example of a trading mistake is not diversifying.

The fact is ,CCC could just as easily have bounced off 8c and went to 15c .

The value is there ,but share prices have nothing to do with intrinsic value . Investors need to understand that stocks can be massively undervalued or overvalued .Time will ensure that prices will gravitate towards their intrinsic value at some stage .

It may even go on to reach a price well in excess of its true value .Share prices are very elastic in regard to their intrinsic value .

Losing money ,or being in the red at any particular time on a share is not a mistake of trading ,it is mandatory . It is going to happen ,and probably often .If a trader cant accept this fact ,then dont trade .

I have been well under water with many of my trades in the past ,but have still made money in the end for many .

To use an analogy ,its like a horse race ,when a horse comes out of nowhere at the back of the field to win a race .
The difference in the share market is that you can cancel your bet half way through the race ,and sometimes miss out on the win .This race with CCC is still in its early stages .

When you are confident in a company ,and the fundamentals stack up ,being in a stock guarantees you will not be left behind when it rerates .

That guarantee of being in there when and if it rerates is why many are prepared to sit it out ,rather than trying to ride the fluctuations .

The people that took a position ,and sat out the early fluctuations in companies like FMG were big winners .Many that tried to trade it missed out on massive gains.

Just because people trade in a different style to another ,doesnt mean one is right and the other is wrong .


It is only over a long period of time ,and over many trades that a statistically relevent trend can be established to prove who was more sucessful as a trader.

In my experience ,longer term and disciplined traders are more successful over time ,because they give ample time for a share to reach its potential through all the noise .Short term markets are very unpredictable, making short term trading difficult .Good luck to those that can master it ,but remember a few wins dont make an expert .

Success in trading needs to be verified over hundreds of trades not what has happened in the last few weeks or months . Also ,a company's progress cannot necessarily be judged by its share price at any given time.