Forgot your password?
Portfolio Performance as at 09/26/2007
2007-09-26 20:59 | Posted by The Graham Investor | Permanent Link | Screen PerformanceWhat a difference a little patience makes! Despite the market drop of the last few months, the GI portfolio is actually up since we last posted an update in May 2007. The so-called subprime crisis took the DOW down from a high of over 14000 to a low of under 12500 in just one month between mid-July and mid-August.
The market made a clear reversal signal on the extreme low day on
August 16th when a massive DOJI (Japanese candlestick pattern) was formed. Taken on its own this
would be a neutral pattern; however, coming as it did after a short but
steep downtrend in the market, it was a clear warning that the bulls were fighting back, the
downtrend was starting to peter out, and a reversal or resumption of the long-term uptrend was due.
Then came the Fed rate cut of September 18th which sent the market soaring.
The lesson here is: if you are a long-term value investor, you should not allow short-term fluctuations to faze you, or panic you into selling. After all, with your undervalued stock purchases you've bought dollars for (hopefully) 66 cents or less, and you're just waiting to sell them when they're worth a dollar or more. Take comfort in the fact that you got value in your stock positions to begin with, and maybe even add to your positions if the market falls after you buy, provided the outlook for the stocks in question has not changed according to your research.