Buy and hold method

The buy and hold method has been under fire lately. Why is Warren Buffett still insisting his buy and hold for life on CNBC today, even though quite a few of his long term holdings have dropped to single digit? Because the method works for him and has been worked for him for a long time.

Does it mean it will work for everybody? NO. Buy and hold sounds so easy, it seems everybody could copy his method and have the same financial success. If that is the case, then how many Warren Buffett in this world? Shouldn't it be many? I never heard of an average investor achieved the massive wealth by his method. He is the only one can do it this well.

Bolt set the 100 meter record with 9.72 seconds. Running is so easy that everybody can do. But can you do it with 9.72 seconds? Even if you eat what he eats, practise the same hours as he does, do exactly same, you are not going to run as fast as him.

The method is nothing wrong. The problem is that investors blindly follow his simple method, which can be described under 10 words "buy a good business and hold it for life". If you really think his method is this simple, making a fortune is really this simple, then who else is going to lose money?

Warren Buffett in front of nation again!

Warren Buffett did a good job this morning to prevent the market from a free fall. The European markets were down over 1% across the board at premarket, now they are green. Even though Mr. Buffett made some serious mistakes over the last year, average Americans still treat him as a investing legend. No matter how the guy like Doug Kass attacked him or questioned his method, he is still the No.2 richest man and still got his touch.

Not D bottom!

GM, GE.

It does not look like a bottom to me!

Remember what I said this to C? Ditto to BAC.

My wild guess last Friday

Look at what I said on Friday at Twitter, the premarket activities make me think my wild guess might come true!

Observation over the weekend

Over the weekend, I saw enthusiasm among the traders, who calls for a bounce, at least short term one. But without some very positive and meaningful fundamental news, the bounce will be short lived and minimal. If with more negative news, the selloff will continue and the big kahuna I have been expecting may finally come true.

Jim Cramer's worst case for Dow

5320 area is also a support on the monthly chart. So his guess is a reasonable on the chart too.

Will it follow next week?

The semiconductor sector is tough to crack. I expect it will do sooner or later.

4 bears

We are on the way to catch up the Great Depression, in length and depth.
via Investment Bloggers' Digest

SQM

SQM was featured in my newsletter.

Hero of the day: Doug Kass?!

I have been closely following Doug Kass, a Street.com commentator who is red hot today for his gutty rally call. Jim Cramer is kissing his ass all day, and other small potatoes at Realmoney follow. But the truth is, Doug Kass called a rally on Feb 17Th, 10 days ago and 10% above the current price. He used the phrase "longest I have been in almost three years". Since then, he has been saying "having been net short for several years - I am now all in long" at Twitter. On Feb 27Th, he said "s and p futures hitting sell stop levels now ", a follower asked if he referred the general market or his own position, he did not answer. He disappeared for several more days until his prediction finally becomes correct today.

After 10 down days, 1 up day is normal; after 180 pts dive, a 33 pts bounce is expected. Why suddenly he is the hero? He would be a hero if the market gains back where it stood on Feb 17Th, he would be even a bigger hero if the market keeps rally afterwards. But certainly not right now, 1st correctness after 10 consecutive wrongness. It shows how pathetic and ignorance the financial professionals are at Thestreet.com. Bash them, I say!

Old prediction

Check it out here. The low of this recent decline is 1312. Now I expect we are going to test 1000.

MS

17% in the pocket.

Too orderly

This selloff is too orderly, more downside ahead!

Update: APC

Still in the newsletter too, now more than 13% in the pocket.

Still shorting BTU

Still in my newsletter, now 17% in the pocket.

FXI

FXI looks even more bearish.

China stock market

The move may be near the end for China.

Fear

Over the weekend, Warren Buffett was no question under the spotlight. The negativity of all the headlines is intensifying the fear in the air. Also on Monday morning, HSBC announced to sell $17billion of shares, even worse is that HSBC plans to announce a two-for-five rights issue, priced at about 300 pence a share, almost 40 percent below the stock’s closing price of 491.25 pence in London on Feb. 27! Currently HSBC is halted in HK trading session. Maybe the fear and the coming volatility is all we need to put a solid floor.

Summary of Feb, 09

What went wrong? I made some long bets highlighted with red color from Feb 4-11 and got stopped out. It looked attempting, made me think the bottom was in. And I paid the price for it.

I feel like a fish who could not help biting the bait. Even though I escaped, I got hurt badly. Conclusion: there are lots of fake bottoming process in a bear market, I would rather being late than wrong. Looking at those trades, all losses. If I ignored the long signals, only focused on short ones, my performance would have been much better this month.

Overall, the newsletter's picks are up almost 5% or $15.85 so far this year.