* * * * * * * * * * * * * * * * * * * * * * * * * * * * * Market Thoughts* * * * * * * * * March 2006* * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *by fg
Thirty years ago, as a young man, I knew I was interested in the stock market. I spend some times in the library reading books about investments. Today, I consider the stock market as one of my hobbies. I record prices, compile data, draw charts, do some computations and keep watch on market movements.
Going over my records, please allow me to reprint some lines or paragraphs, hoping readers will find it interesting and helpful about stock market investments.
VALUES, MARKET CONDITIONS, and PATIENCE
* * * *Charles H. Dow once wrote that an investor “who will study values and market conditions, and then exercise enough patience for six men, will be likely to make money in stocks.”
DIVERSIFICATION for LONG- TERM INVESTMENT
* * *“I believe that the long-range concept of investing, which is part and parcel of the new Dow Theory, has a fundamental appeal to most people. It makes sense, to the average person, to buy a diversified selection of sound common stocks when a long primary bull market is indicated-and then patiently hold these stocks and sell them only after a good many years, when they are overly-inflated in price and a downward movement in the market, of* disastrous proportions, is indicated.”
* * *“As Charles H. Dow once put it, an investor who buys large quantities of stocks with good values when the market is low, and holds on to his position for years while the major trend is upward, often reaps the greatest rewards for his patience.”
* * *“Remember this observation by Dow on patience in holding an attractive position while the main trend is up. I know of no other market philosophy which has proved to be consistently profitable. History has shown us that investors who have patiently held position in good diversified growth stocks in harmony with a primary bull market can accumulate incredible wealth over the years as profit and income accrues.”
* * *The observations made by Dow indicates that the key to profits in stock market lies in riding a primary bull trend, all the way up from its low to its high, in a well-diversified position in growth stocks.
* * *Try to compare for the prices of stocks in the early months of 2003 to the present. For example TEL, BPI, GLO, PCOR,* AC, ALI and PX, to name a few. Prices have doubled, tripled and some even more. It shows here that the above Dow’s investment philosophy could still be applied profitably to present-day markets at our very own PSE.
* * *Year 2003 marks the beginning of a new Primary Bull Market in the history of Philippines Stock Exchange.
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