Subj : Market Action
To   : All
From : Paul Rogers
Date : Fri Feb 25 2005 05:48 pm

Content-type: text/plain

This morning revisions to the 3.1% Q4 GDP estimate were issued, 3.8% vs
consensus of 3.7%.  Apparently this was one of the times when good news
seemed to be accepted as good news.  Prices were up all day, jumping a
couple times.  But the problem is volume was only -2% below average, and
I didn't see anything but momentary spikes in volume when prices were
jumping.  Where were the buyers?  So when we see price action like this
our first question is, "Did ya mean it?"  The volume answers, "Not
really."

Let me finish my value investing strategies from yesterday.  If I were
doing it myself, my first rule is: most stocks in the dumpster are there
for a reason.  Not every cheap stock is something I want to have.  Value
investing takes a special skill evaluating candidates.  It might take a
while for the Street to appreciate the good stocks they're discarding
over every disappointment, real or imagined.  So I'd be especially
careful about my selections, and what I paid for them.  I might be
holding them for a while, and I need to avoid losses.  I'm looking to
take advantage of short-term irrationality on the Street--when they do
something stupid--not to do something stupid myself by arguing with the
market.

And, as I'm investing in mutual funds for my retirement accounts, some
of the same ideas apply.  I want a fund manager and/or advisor that has
a long successful track-record with the fund and with the value style of
investing.  I'd be looking at the fund expenses and turnover rate.
Those have to be low for value funds to be successful.  I'm looking for
funds that have good long-term performance, 10-years.  I also want to
see that they did better than most funds during the 2000, 2001, 2002
Bear Market.  And exceptionally well for 2003, when the stocks feared
during the Bear Market were suddenly wonderful.

Value stocks have already had the "buzz" premium wrung out of them and
should be priced even below their intrinsic value.  They shouldn't have
been affected much by the Bear Market--they've had one of their own
already.  If a fund I'm considering fell like most did during the Bear
Market, the manager is doing things all wrong!  Move on and look at
another.

 Price    Vola-    Momen-   Volume   Oscil-   Summ.
 Change   tility   tum               lator    Index
 -__+     -__+     -__+     -__+     -__+     -__+

 __<_     __>_     __|_     __<_     _<__     ___>     02/18
 <___     __<_     _|__     __|_     <___     ___|     02/22
 __<_     _<__     _|__     _|__     _<__     ___|     02/23
 __<_     _<__     __|_     _|__     _<__     ___|     02/24
 __|_     _<__     __|_     _|__     __>_     ___<     02/25

Timing Signals:  I don't use or recommend timing signals, but they're
fun to watch.  If I did though, well, I might use something like this.
(Be warned!!  It tends to whipsaw around signal points!)

Last Signal: BUY        Date:  02/24/05 S&P:    1200
Winner or Loser:  tbd                   By:     tbd

See my market tracking charts for '03-'04 and my investment strategy
study at my website(s):
http://www.xprt.net/~pgrogers/Pers.html
http://www.angelfire.com/or/paulrogers/Pers.html
http://www.geocities.com/paulgrogers/Pers.html



Paul Rogers, paulgrogers@yahoo.com                       -o)
http://www.angelfire.com/or/paulrogers                   /\\
Rogers' Second Law: Everything you do communicates.     _\_V

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