Hi
@Tiglath, respect your decision to sell down and was personally considering selling down some of my holding when it hit $17 as well. Well its the age old story isnt it. I will just wait till it gets back to $17 but after it dropped under $16 I decided to sit it out until a new ATH is reached again. The house build can wait and I am not pressured to sell or trying to maximize profits by trading it but more power to those that do.
If the BAL T/O was offered at such a premium, with very disappointing future growth prospects and declining sales that would make A2M way, way undervalued at its current price. You might get lucky sometimes and time you exit and entries to good effect but we have been around long enough to know what happens and how quick and far the SP runs away from you on a price sensitive announcement so I dont what to be left on the sidelines when the next one comes. You might get it right once in awhile but being patient and being the tortoise instead of the impatient hare has certainly worked out well as the tortoise has always been a LTH and ridden up each and every wave when the SP has had a major run up.
The charts are a great indicator on the probability of a good exit and entry but its just a way of using historical data to increase your odds of a successful trade, not a guarantee. I will stick to my mentor teachings Warren B and load up on and be concentrated in a company that has a bright future and ignore the short term SP swings.
Since a certain nameless poster loves to quote other financial gurus he would be better served from learning something from the king of them all would s/he not.
Paragraphs 2,3,6 and 7 are especially relevant at this point in time for existing and those considering to be shareholders in A2 Milk Co.
1. Stocks Are a Business
Many investors think of stocks and the stock market in general as nothing more than little pieces of paper being traded back and forth among investors. This might help prevent investors from becoming too emotional over a given position, but it doesn't necessarily allow them to make the best possible investment decisions.
That's why Buffett has stated he believes stockholders should think of themselves as "part owners" of the business in which they are investing. By thinking that way, both Hagstrom and Buffett argue that investors will tend to avoid making off-the-cuff investment decisions and become more focused on the longer term. Furthermore, longer-term "owners" tend to analyze situations in greater detail, and then put a great deal of thought into buy and sell decisions. Hagstrom says this increased thought and analysis tends to lead to improved investment returns.
2. Increase Your Investment
While it rarely – if ever – makes sense for investors to "put all of their eggs in one basket," putting all your eggs in too many baskets may not be a good thing either. Buffett contends that over-diversification can hamper returns as much as a lack of diversification. That's why he doesn't invest in mutual funds. It's also why he prefers to make significant investments in just a handful of companies.
Buffett is a firm believer that investors must first do their homework before investing in any security. But after that due diligence process is completed, investors should feel comfortable enough to dedicate a sizable portion of assets to that stock. They should also feel comfortable in winnowing down their overall investment portfolio to a handful of good companies with excellent growth prospects.
Buffett's stance on taking time to properly allocate your funds is furthered with his comment that it's not just about the best company, but how you feel about the company. If the best business you own presents the least financial risk and has the most favorable long-term prospects, why would you put money into your 20th favorite business instead of adding money to the top choices?
3. Reduce Portfolio Turnover
Rapidly trading in and out of stocks can potentially make an individual a lot of money, but according to Buffett, this trader is actually hampering his or her investment returns. That's because portfolio turnover increases the amount of taxes that must be paid on capital gains and boosts the total amount of commission dollars that must be paid in a given year.
The "Oracle" contends that what makes sense in business also makes sense in stocks: An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.
Investors must think long term. By having that mindset, they can avoid paying huge commission fees and lofty short-term capital gains taxes. They'll also be more apt to ride out any short-term fluctuations in the business, and to ultimately reap the rewards of increased earnings and/or dividends over time.
Warren Buffett: InvestoTrivia Part 2
4. Have Alternative Benchmarks
While stock prices may be the ultimate barometer of the success or failure of a given investment choice, Buffett does not focus on this metric. Instead, he analyzes and pores over the underlying economics of a given business or group of businesses. If a company is doing what it takes to grow itself on a profitable basis, then the share price will ultimately take care of itself.
Successful investors must look at the companies they own and study their true earnings potential. If the fundamentals are solid and the company is enhancing shareholder value by generating consistent bottom-line growth, the share price should reflect that in the long-term.
5. Think in Probabilities
Bridge is a card game in which the most successful players are able to judge mathematical probabilities to beat their opponents. Perhaps not surprisingly, Buffett loves and actively plays bridge, and he takes the strategies beyond the game into the investing world.
Buffett suggests that investors focus on the economics of the companies they own (in other words the underlying businesses), and then try to weigh the probability that certain events will or will not transpire, much like a Bridge player checks the probabilities of his opponents' hands. He adds that by focusing on the economic aspect of the equation and not the stock price, an investor will be more accurate in his or her ability to judge probability.
Thinking in probabilities has its advantages. For example, an investor that ponders the probability that a company will report a certain earnings growth rate over a five- or ten-year period is much more apt to ride out short-term fluctuations in the share price. By extension, this means that his investment returns are likely to be superior and that he will also realize fewer transaction and/or capital gains costs.
6. Understand the Psychology
Very simply, this means that individuals must understand that there is a psychological mindset that the successful investor tends to have. More specifically, the successful investor will focus on probabilities and economic issues while letting decisions be ruled by rational, as opposed to emotional, thinking.
More than anything, investors' own emotions can be their worst enemy. Buffett contends that the key to overcoming emotions is being able to retain your belief in the real fundamentals of the business, and not get too concerned about the stock market.
Investors should realize that there is a certain psychological mindset that they should have if they want to be successful, and try to implement that mindset.
7. Ignore Market Forecasts
There is an old saying that the Dow "climbs a wall of worry." In other words, in spite of the negativity in the marketplace, and those who perpetually contend that a recession is "just around the corner," the markets have fared quite well over time. Therefore, doomsayers should be ignored.
On the other side of the coin, just as many eternal optimists argue that the stock market is headed perpetually higher. These should be ignored as well.
In all this confusion, Buffett suggests that investors should focus their efforts on isolating and investing in shares that are not currently being accurately valued by the market. The logic here is that as the stock market begins to realize the company's intrinsic value (through higher prices and greater demand), the investor will stand to make a lot of money.
8. Wait for the Fat Pitch
Hagstrom's book uses the model of legendary baseball player Ted Williams as an example of a wise investor. Williams would wait for a specific pitch (in an area of the plate where he knew he had a high probability of making contact with the ball) before swinging. It is said that this discipline enabled Williams to have a higher lifetime batting average than the typical player.
Buffett, in the same way, suggests that all investors act as if they owned a lifetime decision card with only 20 investment choice punches in it. The logic is that this should prevent them from making mediocre investment choices and hopefully, by extension, enhance the overall returns of their respective portfolios.
. I'm expecting a pullback shortly and will accumulate on the way down.Regarding Bellamy, the Chinese played this very smart because Bellamy had no choice, but to sell. The SAMR has been be delayed for a while and this was going to hurt BAL big time. Watch SAMR approved for BAL once the accusation is complete. A2M outplayed Bellamy in every department and sailed through the SAMR process without hiccups, whilst Bellamy was ahead of A2M on ASX, they failed in every department. You know there's no comparison between Bellamy and A2M
(20min delay)