what has changed?, page-3

Always enjoy your posts, Ned, and this one (as usual) contains some good advice for some of the inexperienced 'investors' who have been posting some quite immature comments on the FML threads.

You have obviously had an investment strategy which you appear to have adhered to quite rigidly over a long period, and which has worked well for you. I think that having a strategy and sticking with it is probably one of the most fundamental lessons that the new investor needs to learn.

Whatever your strategy may be, it will help you to cope with the uncertainties and anxieties which inevitably arise. Without a strategy, you are simply a gambler, and we know that although a few gamblers occasionally have a win, the vast majority lose.

Obviously strategies vary according to the circumstances of the individual, and their investment goals, but also much depends on their attitude to risk; people with a low tolerance to risk who invest in junior mining companies are walking into a minefield, and are likely to panic and get blown away by the first mine which they encounter.

An experienced investor knows all too well the gyrations which will occur in shareprices, and provided that the fundamentals were right at the time of purchase, and nothing major has changed in the company's circumstances or the market, a drop in the SP simply makes the stock a better buy. If it was a good, sound investment at 40 cents, and it drops to 30 cents purely because of market sentiment (often totally disconnected to the Australian market), why on earth would you want to sell and lock in a loss, when with some patience, and by sticking to your strategy, you can usually turn the paper loss into a real profit when sentiment towards the stock improves?

The thing which really bugs me (and apparently bugs a lot of other investors, as opposed to the day-trade gamblers), is that some individuals buy into a stock expecting to make an overnight profit, and then when the SP drops, they sell at a loss and then continually post negative (usually totally baseless) comments on HC in a vain attempt to drive down the price and justify their badly-timed exit from the stock.

Personally, I have great confidence in the future of FML and in the way that the company has been managed. I know that not everyone shares that view, but I believe that most of the genuine FML investors have faith in the company, and will not be swayed by the whingers who have played a losing game.

Cheers,

Mike
P.S. Apologies to those who want only factual company-specific posts on HC, but I really believe that overall investment strategies are even more important than researching the companies which we invest in.