The Deipnosophist

Where the science of investing becomes an art of living

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Location: Summerlin, Nevada, United States

A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!

07 August 2007


There are many reasons market oscillations fail to frighten me; I mentioned one or two in my reply to Dan's excellent question re JCG and MA. I suspect you would more easily understand, if you could see what I see; thus, I include a chart (below) of MasterCard/MA since its IPO...

[click on chart to enlarge]

Again, I delineate only one trend line: its primary up trend, or continuum. This line conforms to all of my rules for the correct drawing of trend lines (see post in left sidebar); you will note immediately that this decline, as forbidding as it seems while living through it -- and holding the shares! -- registers as barely a hiccough in the stock's continuum; its decline is only a measure of its successful trajectory north and east. This decline will shrivel even further in significance -- if I am correct, and the stock records higher highs over the months and years to come. I believe that will prove to be so, as MA is not a one-season stock.

NB: I since have tweaked marginally lower the trend line (not shown) in anticipation of the base pattern I expect to build off the current budding formation; the shares could break out above the base, but not yet to new highs, on ~13 October 2007, if correct. New highs would follow on the breakout rather quickly. Of course, holding an investment in anticipation of a likely bullish resolution in the future is one that must be monitored closely, seeking any hint of a negative divergence before a serious decline. Yes, that is correct: the current decline does not even merit the moniker of "serious," as it is merely an oscillation prefatory to an intermediate term base -- in advance of new all time highs.

Full Disclosure: Long the shares of MasterCard/MA.
-- David M Gordon / The Deipnosophist


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