G'day @desertredlion.Can I ask why you start a 'discussion' when...

G'day @desertredlion.

Can I ask why you start a 'discussion' when you immediately start with a guilt by association fallacy? Are all shorters wrong? Sound investment means taking information from all perspectives whether you agree or not and certainly not on stereotyping. The points below are not to attack but hopefully provide a different, yet valid perspective. I mentioned position for full disclosure and it appears you are a simple investor, because you would have otherwise understood that shorts can also be used to hedge against a long position, meaning I can be profit from both long and short movements (or better yet, pairs trade with a better forming competitor ). The only difference is that when the hard times come, I don't suffer the consequences as I profit using short-term moves due to both current financials and sentiment rather than waiting idle in the 'hope' of improvement. The difference between what you see and what I see is actually the timeframe of exposure not long term perspective. Considering I trade profitably full-time, my advice is that failure to plan the trade timeframe is the equivalent of capital burnt due to opportunity cost lost and is why I'm currently short. Doing this well takes time and skill.

It's hard to work out where you stand, when you support my points on inventory, dividend, EPS and even price sentiment.
If I wanted to beat the message home for pure fear, I would have used the lower sales/earnings estimates rather than the upper end.

For reference, your mention of virgin Australia is a severe lack of foresight because it didn't 'leave', it went into administration... which for the sit and hold investor could very well be the worst advice you can offer. This is exactly why you need to take facts at hand as well as sentiment. The outlook that BBN directors have laid out for shareholders is significantly less than both they and shareholders expected. So much so that they issued the annoucement prior to earnings. This is not perspective, this is fact. To put it another way, if someone were to advise you to buy into a company with the revenue stream in substantial decline, would you be keen to jump on board because it has been ok in the past? If your income depended on making money from it now, you wouldn't buy it and so should be the approach. Anyone's advice to do so is kidding themselves until you have solid support for the counter case... something we have yet to see and was exactly the point I tried to make. Buy smart, not hard.

For initial investors, the recommendation should therefore be to wait until confirmation. This goes regardless of either a technical or fundamental approach. For existing holders, dollar cost averaging will only work if a real reversal is actually warranted and thus is ultimately dependent on on fundamentals supporting the move (especially for longer term investors). This is why you may hear people saying add to winners not losers.

P.S. As a quant based trader, there is backtesting to show that you are more likely to gain buying at all time highs than all time lows (Ref), though this doesn't mean you can't make money on both.

And for those wondering about where that point on birth considerations came from... here's the article from forbes (ref):



Buy shares based on data, not hope. Have a perspective and back it.
John