trading/investing in commodities - why do/have people prefer equities?
 

Just wondering why so many people go for equities? The recent last few years for commodities seems to of been great, why have so many not taken advantage?

Copper has shooted back up in the last couple of weeks from 6200 or so to 7400, nickel has now almost hit 50,000, gold is starting to rise again, uranium has gone through the roof.

Why isn't/didn't everyone make trades/investments in these?

Is it a case of high risk - high return and these coin flips have landed on the right side, or have they been genuinely very good investments?

Re: trading/investing in commodities - why do/have people prefer equit
 

because commodities are always going to return less than equitites in the long run. Gains generally come from productivity increases and competitive advatages. Kinda hard to get those in commodities.

Re: trading/investing in commodities - why do/have people prefer equit
 

I'm not an expert on this but I'm interested in the topic so I'll take a stab at it...

* Stocks have a very long and successful history. You can look at 100 years of data and make statements about how the real return has been about 7% real and 11% nominal. And the magnitude and direction of the risks is fairly well understood -- mostly you will do pretty well if you invest for long periods of time, though you can get burned in the short run and with bad timing you could pretty easily get below average returns over a 10 or 15 year period. And you can apply some theory here and say that stocks should return something related to business's ROI + a risk premium. There must be some finance undergrads here who can state that much more eloquently, but hopefully that gives you the flavor.

* Pure commodities (e.g. physical gold, not gold futures or gold mining) have historically earned the inflation rate. This pretty much also applies to housing (see the most current version of Shiller's Irrational Exuberance). In fact, until the last few years, people mostly bought commodities as an inflation hedge moreso than a true investment.

* Commodities futures -- I think this is where the action has been, but I'm not sure we know much about the long term performance. This paper notes that commodities futures have performed as well as stocks while offering extra diversification, but it's "only" 40 years of data. I believe this paper is considered to be very influential but I'm not an expert here. Interesting read in any case.

Also, check out this article by Jeremy Siegel.

Re: trading/investing in commodities - why do/have people prefer equit
 

why not trade/invest commodities for the short run though?

if you want sunshine all year round, you don't live in the place with the highest predicted average of sunshine all year round, you move to the places in each month (or day even) which has the highest predicted average sunshine in that month (or day even).

Admittedly you can't guarentee instead you may get bad variance, and when you arrive at your new place it could be thunderstorms, ruining the utility you gained from previous days of sunshine, but still, it should yield you the highest expected sunshine.

maybe i'm wrong, but when I see a lot of people making/made a lot of money, I'm interested to join in the fun [img]/images/graemlins/smile.gif[/img]

Maybe I've missed the commodity boat, but from what I've read there are still a few stops to go. then set up the CFD account and short short short [img]/images/graemlins/smile.gif[/img]

Re: trading/investing in commodities - why do/have people prefer equit
 

Buying index funds is like 2/4 limit - any idiot can do it and you don't have to know what you're doing. Trading futures is like high stakes no limit - you have to be bankrolled well and know what you're doing. It's amazingly simplistic to look at futures and say they don't always go higher and higher like stocks do. Contrary to stocks, it's just as easy to short futures as it is to go long, and it's essential to do at times. A good trader can make money in futures or stocks.

Personally, I stick to stocks because I can find ones with a specific story that's likely to move the stock right now.

Re: trading/investing in commodities - why do/have people prefer equit
 

yeah, most arguments here and right on the money. But kane, the point is long term you cant make anywhere near as much money. But short term you could. You just need to know those markets like the back of your hand.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
Just wondering why so many people go for equities? The recent last few years for commodities seems to of been great, why have so many not taken advantage?

[/ QUOTE ]

A couple more comments... Part of why commodities have done well is b/c more people have been buying them (or futures). Part of it is b/c the world economy has been great and demand from China in particular for oil, copper, and other commodities has just skyrocketed. I forget the exact percent, but if you look at oil demand over the last 10 years, most of the increase in demand is from China (though of course their level of demand is still a bit less than the US's).

But the question is whether the rise in commodity prices is permanent or temporary. I think it's fair to say that most people think it will be temporary given that commodity prices historically (100+ years) have basically increased at the rate of inflation. For most commidities, the cost is roughly going to equal the cost of extraction (mining/drilling). Unless you think there is some reason those costs will rise faster than inflation, it's hard to come up with a reason for the commodities themselves to increase faster than inflation.

Oil, of course, is a little different than the other commodities but maybe not as much as many people think as we get closer to the point where various substitutes become more feasible.

Re: trading/investing in commodities - why do/have people prefer equit
 

Commodities don't earn dividends, i.e., when you're holding it, it's just sitting there not doing anything. Also, note that when you trade commodities futures, there's someone on the other side of the trade who's getting the exact opposite results you are. Basically, the only people who ought to be in the business of trading commodities are 1. those who produce and consume these commodities, and 2. those who are even better at trading commodities than those players in group 1.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
yeah, most arguments here and right on the money. But kane, the point is long term you cant make anywhere near as much money. But short term you could. You just need to know those markets like the back of your hand.

[/ QUOTE ]

Leverage is a much bigger factor in futures trading. If done successfully, like a Jim Rogers figure, your short term gains would exceed most investors' long term gains. Of course, futures markets are very competitive (and much more volatile) so it would be unreasonable to expect many traders to profit in the short term.

Futures are also taxed more favorably. I believe it's at 60% long term and 40% short term rates.

Some other poster mentioned the ease of shorting. There is no uptick rule.

Re: trading/investing in commodities - why do/have people prefer equit
 

Two words: risk premia. I could throw a dart at a stock table and I'll outperform bonds and pretty much every other investment over the long haul. If I did the same with commodities I'd be a net loser because of transaction costs.

Re: trading/investing in commodities - why do/have people prefer equit
 

I won't discuss commodities vs. general equities. But if you want to invest in copper/gold or whatever, you have much more leverage with equities. For example, let suppose a gold mining companies that produces gold with a cost of 300$/oz. If gold jumps from 600$ to 1200$ (a 100%) gain, your company will profit 900$/oz instead of 300$/oz. So basically the share price of the company shoud increase by 200% on a 100% raise of the spot price. If you use the same example but you suppose tha the company produces gold at 500$/oz, then you get tremendous leverage as they would profit 700$/ instead of 100$, a 600% gain.

I follow commodities very actively but I trade the resource sector equities... More risk, more volatility and more upside.

Re: trading/investing in commodities - why do/have people prefer equit
 

This discussion has arisen before.

But basically it's a very different analysis. Trying to figure out whether Best Buy is properly valued as a business operation and trying to analyze it's future profits is a different calculation than trying to figure out what will happen to the future price of grain, based on consumption and production and weather and politics etc. in China, Russia, India, U.S., Japan, etc. etc. etc.

It's an even greater contrast if you pick a company that solely sells in the U.S. market and has little or no profits derived from overseas operations.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
Buying index funds is like 2/4 limit - any idiot can do it and you don't have to know what you're doing. Trading futures is like high stakes no limit - you have to be bankrolled well and know what you're doing.

[/ QUOTE ]

Pig makes a good point here...why try to compete with a bunch of commodity experts for a few short term gains when you could do just as well by taking the long term view & sticking those same dollars into mutual/index funds.

Re: trading/investing in commodities - why do/have people prefer equit
 

thanks for all the replies.

the general consensus seems equities are a wiser investment becuase of their historical greater growth.

i understand that, just given the recent huge growths in some commodities, i still fail to understand why people have not invested in them or in resource sector equities. im not saying i think people should do it for 2+ years, just for say 6-12 months in gold, silver and uranium for example. enjoy the price rises while they should still occur.

my feeling is that those people who are aiming to make big bucks are those going for commodities, and those people looking for a safe 10%-15% long term (10 years+) return are going for equities.

personally im in a controlled rush (if that makes any sense), earning 10% of 100K doesn't do it for me, earning 20% does. now i know about warren buffet and how he couldnt even manage that, but i'm willing to take higher risks, im willing to lose a bit. what im looking for is going for undervalued companies with great growth potential, im willing to take risks, hopefully multiple big risk investments but with managable amounts invested in them.

for example, one of missmisery's investments which he has been a very strong advocate of, strateco resources. I invested in this 6 weeks ago or so. It's a company which deals with a resource (uranium) with has experienced huge price rises and still has some way to go (hopefully), in addition it has huge potential, with little downswide. kinda like the best value stock in a booming sector.

these are the companies im looking to invest in. i feel im learning all the time, i guess im a 22 year old with 95K or so looking to make some decent returns. if i lose some, so be it, i should be a kid coming out of university with 15-20K in debts, i just am willing to invest in high risk companies which have proportionally higher returns than should be expected at that level of risk.

anyways, enough ramblings,

thanks as ever for your replies,

john

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
im not saying i think people should do it for 2+ years, just for say 6-12 months in gold, silver and uranium for example. enjoy the price rises while they should still occur.


[/ QUOTE ]

Should, huh?

[ QUOTE ]

personally im in a controlled rush (if that makes any sense)


[/ QUOTE ]
You're going to take big risks, but you're going to do it safely.

You're going to gamble a lot, but only do it a little at a time.

You're going to take a cautious approach to throwing caution to the wind.

[ QUOTE ]

It's a company which deals with a resource (uranium) with has experienced huge price rises and still has some way to go (hopefully), in addition it has huge potential, with little downswide.

[/ QUOTE ]

With all due respect you are talking like someone who is about to lose his ass in the markets.

eastbay

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
[ QUOTE ]
im not saying i think people should do it for 2+ years, just for say 6-12 months in gold, silver and uranium for example. enjoy the price rises while they should still occur.


[/ QUOTE ]

Should, huh?

[/ QUOTE ]

i believe it will more likely go up than down. i base this on what i have read and a balance of other peoples' opinion.

[ QUOTE ]

personally im in a controlled rush (if that makes any sense)


[/ QUOTE ]
You're going to take big risks, but you're going to do it safely.


[/ QUOTE ]80% of my money will be in savings, poker bankroll, the other 20% i want in high risk-high return investments. sorry i should of mentioned this earlier.[ QUOTE ]

You're going to gamble a lot, but only do it a little at a time.


[/ QUOTE ] again what i invest i will invest in high risk[ QUOTE ]

You're going to take a cautious approach to throwing caution to the wind.


[/ QUOTE ] same as above, i don't see what the difference is between an approach of investing in undervalued volatile stocks and undervalued low volatile stocks bar the neccessity with the former to have a high risk tolerance of your investment. i have given the small amount i am investing with.

i like to think of it as playing tight aggressive, what i do put into the markets, i put into a select number of stocks which are undervalued and highly volatile. i can't go broke becuase im only playing with 20% of my bankroll. the other 80% im grinding at 1-2 limit.
[ QUOTE ]
[ QUOTE ]

It's a company which deals with a resource (uranium) with has experienced huge price rises and still has some way to go (hopefully), in addition it has huge potential, with little downswide.

[/ QUOTE ]

With all due respect you are talking like someone who is about to lose his ass in the markets.

eastbay

[/ QUOTE ]

[/ QUOTE ]

i can only lose my ass if i invest my ass, im waving my ass near the market, if it gets too hot, ill walk away, im not going to charge in there ass-first ready to risk getting it turned into charcoal if the stocks go bellied-up.

thanks for the reply, its replies like this which is why im only putting in max 20% unlike that 50% or so i was putting in when i first started doing this and posting here a few months ago. maybe come the summer ill look back and of learnt more. hopefully [img]/images/graemlins/smirk.gif[/img]

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
i understand that, just given the recent huge growths in some commodities, i still fail to understand why people have not invested in them or in resource sector equities. im not saying i think people should do it for 2+ years, just for say 6-12 months in gold, silver and uranium for example. enjoy the price rises while they should still occur.

[/ QUOTE ]

I hope your crystal ball is in good working order. I wonder if you'd be playing the same tune back when tech stocks were the hot ticket.

Re: trading/investing in commodities - why do/have people prefer equit
 

Storage costs, less liquid, insurance costs, negative carry in many cases, ad infinitum.

Re: trading/investing in commodities - why do/have people prefer equit
 

come all I wanna see his pics of a 50 barrels of oil in his back yard

Re: trading/investing in commodities - why do/have people prefer equit
 

JK:

It's not just the history of prices. Theoretical expectations (which, although, have been determined from history) for commodities are lower.

Also, this isn't an issue of high risk and high reward. Commodities offer high risk and low reward. They do not belong in a portfolio. If you want to make money quickly, you should load up on the highest reward assets, not low reward assets. Some of the poker analogies above seem misleading to me. Here are some better analogies:

individual stocks are like playing 10/20 hold 'em

index funds are like five-tabling 2/4 hold 'em

commodities are like playing $50 blackjack

Individual stocks have the same expectation as index funds, but lower variance. Some people spend a lot of time trying to pick the best stocks (i.e., selecting the juiciest 10/20 table). It's true that leveraged commodities can have the biggest upshot. That doesn't translate into a higher EV though. Blackjack, no matter how high the stakes, will be a less profitable game than hold 'em.

There is a case to be made for commodities futures, however. They do have an expectation higher than inflation (unlike commodities alone), and arguably stock-like returns. Commodities futures funds can be a very strong diversifier. They go up when stocks and bonds go down (in an inflationary environment).

Re: trading/investing in commodities - why do/have people prefer equit
 

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Individual stocks have the same expectation as index funds, but lower variance.

[/ QUOTE ]

This is of course, untrue, in a variety of ways.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
Commodities don't earn dividends, i.e., when you're holding it, it's just sitting there not doing anything.

[/ QUOTE ]

Not exactly true. You only need to put up a few percent margin to purchase a commodity futures contract. The rest can be invested in interest-bearing instruments. (T-bills being the instrument of choice for most futures traders.) The interest income can be thought of as a type of dividend.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
Individual stocks have the same expectation as index funds, but lower variance.

[/ QUOTE ]

What in the world are you talking about? I can find hundreds (thousands?) of stocks whose implied and historical volatility (over whatever time frame you choose) is greater than that of the S&P 500 Index.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
Just wondering why so many people go for equities? The recent last few years for commodities seems to of been great, why have so many not taken advantage?

[/ QUOTE ]

One of the biggest reasons is liquidity. The biggest funds need to purchase a whole bunch of whatever to have a meaningful impact on their portfolio. So they need to be in a market that's deep enough to afford them the liquidity to buy and sell without having overly dramatic market impact. That greatly limits the sandboxes in which they can play. Large-cap stocks, debt, currencies...

Crude oil is one of the few commodities that's deep and liquid enough for very large traders to accumulate without paying up too much due to the price impact of their buying.

If a small trader wants to buy a handful of O.J. or pork belly contracts, no problem. But if a major fund wanted to buy 10K contracts--yikes!--the average price would be very, very ugly.

Re: trading/investing in commodities - why do/have people prefer equit
 

Commodities can be very profitable and deserve a place in any diversified portfolio. Most people see them as higher risk and more volatile. They are not. Only the mis-use of their leverage makes them appear more risky.

Many commodity contracts are less risky than individual stocks (pound for pound). You just need to employ proper money management and position sizing relative to your account.

Commodities are better suited to medium/long term trading due to their trendiness. Their is less 'noise' in commodities' prices and the trends are more pure and last longer. This makes them more suitable for a trend-following strategy.

They also are uncorrolated (on the whole) to stocks.

Most people however, don't have an account large enough in which to safely trade/invest in commodities. That's why so many people go bust trading them.

Re: trading/investing in commodities - why do/have people prefer equit
 

gull - No. What conceivable reason can you think of as to why a basket of stocks will have more variance than individual stocks? Hint: there is no reason because it is untrue.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
thanks for all the replies.

the general consensus seems equities are a wiser investment becuase of their historical greater growth.

[/ QUOTE ]

I didn't see that as a consensus at all, just a couple opinions. A statement like that also shows that you do not understand the nature or purpose of futures.

[ QUOTE ]
i understand that, just given the recent huge growths in some commodities, i still fail to understand why people have not invested in them or in resource sector equities.

[/ QUOTE ]

What makes you think they haven't?

[ QUOTE ]
my feeling is that those people who are aiming to make big bucks are those going for commodities, and those people looking for a safe 10%-15% long term (10 years+) return are going for equities.

[/ QUOTE ]

You keep saying commodities. Do you mean futures? Or do you think people keep drums of oil in their back yards?

Re: trading/investing in commodities - why do/have people prefer equit
 

Sorry about what I said above.

Individual stocks obviously have higher variance than index funds. When writing the post, I edited my sentence to clear up pronoun confusion later, but missed fixing up that part of the sentence. My sentence was clearly but unintentionally false, and also incongruous with the rest of my post. Owning more stocks will diversify risk and reduce variance.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
You keep saying commodities. Do you mean futures? Or do you think people keep drums of oil in their back yards?

[/ QUOTE ]

There are other futures besides commodity futures, including those on stock indices, debt instruments, and foreign currencies.

Moreover, one can own phyical crude oil (or soybeans or cattle or coffee) without storing it in the back yard.

Re: trading/investing in commodities - why do/have people prefer equit
 

I think there is a lot of good answers here, but let me add one. Stocks are part ownership in a business, and thus have an intrinsic value based on that business's assets and cash flow. Commodities are only worth what people will pay for them.

You might say well, stocks are only worth what people will pay for them as well, but that's only true in the short run. For example, if you buy a dividend paying stock for $10 because it pays $1 a year in dividends, and because it will safely continue to do so for a long time in the future, it has intrinsic value. If it starts trading at $2, you know it's too cheap, and you can buy more or ride it out continuing to earn 10% a year on your original investment. Any business that has enough cash flow to keep paying a $1 dividend is worth much more than $2 per share and the market will soon correct that price. If not, the company can jump in and buy back shares to help the market "recognize" it's mistake.

If you buy silver at $10 and it starts trading at $2, you don't know where it is going next. You have no dividends to support the value of your investment, and your silver has no cash flow to buy more silver with when it gets too cheap.

This is the simplistic argument, obv. intrinsic value is dependent on total company cash flow and how well management distributes/reinvests it. I.e. a company with no assets & profits, or being run by a management team that takes all profits before they reach shareholders has no intrinsic value and trades like a commodity.

The other argument against commodities is the Julian Simon argument, that over long periods commodities always get cheaper, when measured in relation to income levels. I don't know if that means matching inflation as previously asserted on this thread, but it's similar enough to make sense. Essentially if commodities grow at 3% per year (the inflation rate) they'll cost the same every year. But if the stock market grows at 8% per year, it takes less shares of stock to buy commodities over time.

John Bogle was just quoted as saying commodities are useful only for speculation, and that's a reasonable opinion. Commodities are there to help you either get richer at a faster rate, or help you go broke at a faster rate, than the stock market typically operates at.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
[ QUOTE ]
Commodities don't earn dividends, i.e., when you're holding it, it's just sitting there not doing anything.

[/ QUOTE ]

Not exactly true. You only need to put up a few percent margin to purchase a commodity futures contract. The rest can be invested in interest-bearing instruments. (T-bills being the instrument of choice for most futures traders.) The interest income can be thought of as a type of dividend.

[/ QUOTE ]

You can't count the margin that's held in treasures to be part of the return that commodities return. That's like saying if you're at the 0% house edge blackjack table and the casino asks you to post $10k to be extended $20k in credit, that you're playing a +EV game as long as the casino sweeps the $10k into treasuries on your behalf. You're foregoing the interest on the $10k by posting it for the duration of your play time, so you can't take credit for that as part of the returns on investing in commodities.

To give another example, suppose I enter into a $20k futures contract with you. We both find someone willing to guarantee our respective ends of the contract with a deposit of $10k (and with no fees charged). At the settlement date, the spot is identical to the futures price, and we made $500 each on our deposit. It would be wrong to attribute any of that return to the commodity. The futures contract will pay off what it will pay off, and the interest on the deposit will be what it will be. If anything, being forced to post a deposit should be considered a cost of entering into the contract since it restricted our freedom of choice.

Re: trading/investing in commodities - why do/have people prefer equit
 

I understand your distinction DesertCat between stocks and commodities, I just don't think it proves anything. Real estate is still a good investment even though it is only worth what people will pay for it. But Julian Simon's argument is interesting, have never thought about that before.

Re: trading/investing in commodities - why do/have people prefer equit
 

Real Estate isn't exactly the same as commodity investing. Real Estate can and should be run like a business. You buy a house and rent it out. The rent is your dividend. The appreciation should increase with inflation.
Commodities on the other hand have no rent payments. In fact it can cost something to hold them. This gives them a slightly negative return adjusted for inflation.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
* Commodities futures -- I think this is where the action has been, but I'm not sure we know much about the long term performance. This paper notes that commodities futures have performed as well as stocks while offering extra diversification, but it's "only" 40 years of data. I believe this paper is considered to be very influential but I'm not an expert here. Interesting read in any case.

[/ QUOTE ]
This is really a seminal piece of research.

It explains why commodities futures, in the right dose, can reduce a portfolio's risk without significantly harming return.

Here's another article that tries to explain the concept.
How Worldly Is Your Portfolio?

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
Real estate is still a good investment even though it is only worth what people will pay for it.

[/ QUOTE ]

Max pretty much answered this, real estate is only worth what the underlying rents make it worth. Just let me add that the bubble of the last years happened when too many people forgot this principle and started paying prices that weren't justified by rents.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
[ QUOTE ]
* Commodities futures -- I think this is where the action has been, but I'm not sure we know much about the long term performance. This paper notes that commodities futures have performed as well as stocks while offering extra diversification, but it's "only" 40 years of data. I believe this paper is considered to be very influential but I'm not an expert here. Interesting read in any case.

[/ QUOTE ]
This is really a seminal piece of research.

It explains why commodities futures, in the right dose, can reduce a portfolio's risk without significantly harming return.

Here's another article that tries to explain the concept.
How Worldly Is Your Portfolio?

[/ QUOTE ]

They cherry picked the end date. If they had finished the study as little as a year or two earlier, the total returns would have been cut substantially. The SPCI-G (S&P Commodity index Geometric series) was at 1360 at the end of their study (Dec. 04). It was at 822 three years earlier, those last three years increased returns by 70%.



[ QUOTE ]


Here's another article that tries to explain the concept.
How Worldly Is Your Portfolio?

"Quite simply, by dividing your money between just two types of investments, you take on more risk than you would by spreading it over a variety of assets that rise and fall at different times"


[/ QUOTE ]

Emphasizing "fall" is appropriate for commodities, because historically, that's what they've mostly done. From Dec. 1979 to Dec. 1999 the index went from 1778 to 904. Ouch, losing half your money while inflation takes another half. Unlike stock indexes, which understate actual returns because they don't include dividends, the commodities indexes are raw charts of pain over many periods. From 1970 to now, even in this huge bubble we are going through, the SPCI-G has gone from 625 to 1514. That's not remotely keeping up with inflation.

If you look at S&P's price histories, you'll indeed see that futures tracking indexes do much better than the raw commodities indexes as the study claimed. But it's not magic. It's because the futures indexes include include cash interest earned in the required margin accounts. When you have a depreciating investment, even margin interest is going to have a substantial positive affect on returns over time.

Raw commodities are clearly uncorrelated with stocks. But their horrible long term returns don't make that much of a value. Commodities futures have a much better track record, on par with stocks the last 40 years, but I still have some skepticism due to the recent bubble and some possible data influences. In the case of the SPCI the indexes are new, and the data was recreated from historical records. Indexes are created to be sold, and when presented with a thorny issue the creators are biased to choose the answer that makes historical returns as high as possible.

Re: trading/investing in commodities - why do/have people prefer equit
 

[ QUOTE ]
im willing to take risks, hopefully multiple big risk investments but with managable amounts invested in them.

[/ QUOTE ]

Didn't you sell a large amount of gaming stocks right after the market fell?

[ QUOTE ]
for example, one of missmisery's investments which he has been a very strong advocate of, strateco resources. I invested in this 6 weeks ago or so. It's a company which deals with a resource (uranium) with has experienced huge price rises and still has some way to go (hopefully), in addition it has huge potential, with little downswide. kinda like the best value stock in a booming sector.

[/ QUOTE ]

[ QUOTE ]
i can only lose my ass if i invest my ass, im waving my ass near the market, if it gets too hot, ill walk away, im not going to charge in there ass-first ready to risk getting it turned into charcoal if the stocks go bellied-up.


[/ QUOTE ]

So you consider this stock undervalued, but, if the stock were to fall and 'get too hot' you would 'walk away' despite the company being even more undervalued?

I really hope for your sake that the market never falls, because I can see you getting out at the bottom multiple times until you change your mindset. Or at least stop reading whatever it is you read.