guys your opinions on difference between traders and investors

[Werner_1]

So, my final answer, both require skill, but different skills for each strategy. they differ vastly... if you look at Buffett, he worked like anything all the time to select the correct shares, it worked very well for him, but wouldnt have worked for a trader, and the trader (George Soros) might use totally different approach, both make tonnes of money...

[john_1]

Werner Everybody who enters the market does so for ONE reason....to make a profit.....The only diffrence in everybodies stratergy is TIME. Everybody has to select a share of instrument and the way the make that selection differs but that process happens outside off the market...once you enter the market the only diffrence is TIME..think about it. TIME is the only varriable along with trading costs.

[Werner_1]

I have to agree with that, John! And time is the factor that makes the different strategies aparent, e.g. short term is more reliant on the prices moving where they want/think it will move in the very near future, while long term investing bases decisions more on the business fundamentals as opposed to the shareprice with the idea that the price will move higher on a good business over time... yes, all based on time, which leads to slightly different approaches to selecting shares. and the skill level differs based on this selecting approach...

[louisg]

John, what about taxes? You need to add (or should I say subtract)that to your calculations. You mentioned above a study that "proves" one should pick the winners to outperform the market. What that study DID NOT mention was the AFTER TAX performance of such a short term strategy. Someone buiyng and selling in the short term will be deemed a TRADER and therefore TAXED at higher levels. I am of the opinion if one looked at the AFTER TAX performance of the short term winner strategy, it would significantly UNDERPERFORM the market or any benchmark in the long run. OMO

[louisg]

Great definition Werner.

[#6]

I have watched (read) this debate washing between John, Chartist et al & Louisg, Werner et al & am left wondering why any one position has to be right? Why cant both be right for each side for their own specific reasons? "Investing doesn't mean the same thing to everybody" - I am a Value(Long term)investor & believe that you make your money when you buy. ie buy low enough & you are always in the money AGL @R88.00 in Nov 2001 vs R198 yesterday = good returns. I am now expanding my financial vocabulary thanks to John et al & will definitely be exploring new horizons, while keeping my Portfolio going concurrently. Lets hope today is a good day

[SimonPB]

Bruberi, that's exactly it. there is no 'right' way rather many different ways. but people tend to defend their beliefs and impose them on others.

[john_1]

The main thing I would like to see changed is the way the TAX man views trading...I believe the current legisaltion is designed to protect the Money managment industry and actually predjudices savers..If I trade but make no withdrawls for 10 years how can that be seen as income generative..point TAX the withdrawls at Marginal rate and leave the active investor to do the only thing he can to grow his money...leverage time.

[Werner_1]

Simon's right, but if you read all the comments, mostly from the debate a while back, you will see it tends to be the short term guys that try to impose their beliefs on the long term guys, for some reason. My view is that the strategies work well if combined, and people have differnet goals and thats where different strategies come from... But i must say, when someone attacks your strategy saying it is "Ambitionless" and not the right way to do things, etc, this can irritate many people!

[john_1]

LG if a trading before tax outperforms the index and the GOV want to create wealth, and an independent old age population. Then prehaps the problem is not trading but the current legisalation arround trading.

[HiSo]

Sorry, just one more question for the long term guys. If you identify a share thats cheap in your assesment, do you immediately buy it or do you wait to see a reveral pattern in the charts (eg: inverse head and shoulders etc). I've been eyeing ACL but I'm not sure its the right time to get in. Also think that Platinum stocks will be above these levels in a good few years but don't know when to get in. I know its impossible to pick the bottom but any ideas on how to at least try and buy as close to the botom as possible?

[john_1]

Oh stop being so sensitive...if it sounds like I am trying to impose my views I am sorry..My view is that the only thing anybody has is time...use it how you want.

[SimonPB]

both sides have been preaching to the other. hence this debate got boring a long time ago.

[Werner_1]

Well, what i do is to look at the fundamentals to decide if i like the company and if i would like to hold it for long term, like you mentioned plat is possibly going to pick up again, and this could be a good business, i look at the div's that can be expected (this will be what gives me cash over the years) and for your entry, i do look at the charts, higher volumes, support. but am not too fixed to that, my logic says that if one is happy with the price and dividend and plan to hold for long term, it could be worth getting in. The dividend is important as this will generate cash to re-invest and compound.

[Werner_1]

no worries...

[john_1]

I consider my wrist slapped.

[SimonPB]

nah, slapped a little ***** for me. Consider drinks on you next time ...

[Brazen]

Who thinks Standard Bank should reintroduce the snacks?

[john_1]

When? I am thirsty..its friday and I am sure I just saw a plane go past.

[Werner_1]

I guess we are all a bit guilty... lets rather focus our energy on constructive comments. lol...