SAMBA

Make sure that smbfs (samba file system) support is built into the kernel as a MODULE.

Command to mount Window$ box through network:

1.  mkdir /mnt/windows (if not already created)
2. mount -t smbfs //192.168.1.3/SharedDocs /mnt/windows -o username=Administrator,password=(password for windows user 32....)

(Only root user can copy files to the M$ machine (for now))

vi /etc/samba/smb.conf

# This is the main Samba configuration file. You should read the
# smb.conf(5) manual page in order to understand the options listed
# here. Samba has a huge number of configurable options (perhaps too
# many!) most of which are not shown in this example
#
# Any line which starts with a ; (semi-colon) or a # (hash)
# is a comment and is ignored. In this example we will use a #
# for commentry and a ; for parts of the config file that you
# may wish to enable
#
# NOTE: Whenever you modify this file you should run the command "testparm"
# to check that you have not made any basic syntactic errors.
#
#======================= Global Settings =====================================
[global]

# 1. Server Naming Options:
# workgroup = NT-Domain-Name or Workgroup-Name
workgroup = WORKGROUP

# netbios name is the name you will see in "Network Neighbourhood",
# but defaults to your hostname
; netbios name =

# server string is the equivalent of the NT Description field
# server string = Samba Server %v

# Message command is run by samba when a "popup" message is sent to it.
# The example below is for use with LinPopUp:
; message command = /usr/bin/linpopup "%f" "%m" %s; rm %s

# 2. Printing Options:
# CHANGES TO ENABLE PRINTING ON ALL CUPS PRINTERS IN THE NETWORK
# if you want to automatically load your printer list rather
# than setting them up individually then you'll need this
printcap name = cups
load printers = yes

# It should not be necessary to spell out the print system type unless
# yours is non-standard. Currently supported print systems include:
# bsd, sysv, plp, lprng, aix, hpux, qnx, cups
printing = cups

# Samba 3.x supports the Windows NT-style point-and-print feature. To
# use this, you need to be able to upload print drivers to the samba
# server. The printer admins (or root) may install drivers onto samba.
# Note that this feature uses the print$ share, so you will need to
# enable it below.
# printer admin = @
printer admin = @adm
# This should work well for winbind:
; printer admin = @"Domain Admins"

# 3. Logging Options:
# this tells Samba to use a separate log file for each machine
# that connects
log file = /var/log/samba/log.%m

# Put a capping on the size of the log files (in Kb).
max log size = 50

# Set the log (verbosity) level (0 <= log level <= 10)
; log level = 3

# 4. Security and Domain Membership Options:
# This option is important for security. It allows you to restrict
# connections to machines which are on your local network. The
# following example restricts access to two C class networks and
# the "loopback" interface. For more examples of the syntax see
# the smb.conf man page. Do not enable this if (tcp/ip) name resolution does
# not work for all the hosts in your network.
; hosts allow = 192.168.1. 192.168.2. 127.

# Uncomment this if you want a guest account, you must add this to /etc/passwd
# otherwise the user "nobody" is used
; guest account = pcguest
# Allow users to map to guest:
map to guest = bad user

# Security mode. Most people will want user level security. See
# security_level.txt for details.
security = user
# Use password server option only with security = server or security = domain
# When using security = domain, you should use password server = *
; password server =
; password server = *

# Password Level allows matching of _n_ characters of the password for
# all combinations of upper and lower case.
; password level = 8
; username level = 8

# You may wish to use password encryption. Please read
# ENCRYPTION.txt, Win95.txt and WinNT.txt in the Samba documentation.
# Do not enable this option unless you have read those documents
# Encrypted passwords are required for any use of samba in a Windows NT domain
# The smbpasswd file is only required by a server doing authentication, thus
# members of a domain do not need one.
encrypt passwords = yes

# The following are needed to allow password changing from Windows to
# also update the Linux system password.
# NOTE: Use these with 'encrypt passwords' and 'smb passwd file' above.
# NOTE2: You do NOT need these to allow workstations to change only
# the encrypted SMB passwords. They allow the Unix password
# to be kept in sync with the SMB password.
; unix password sync = Yes
# You either need to setup a passwd program and passwd chat, or
# enable pam password change
; pam password change = yes
; passwd program = /usr/bin/passwd %u
; passwd chat = *New*UNIX*password* %n\n *Re*ype*new*UNIX*password* %n\n \
;*passwd:*all*authentication*tokens*updated*successfully*

# Unix users can map to different SMB User names
; username map = /etc/samba/smbusers

# Using the following line enables you to customise your configuration
# on a per machine basis. The %m gets replaced with the netbios name
# of the machine that is connecting
; include = /etc/samba/smb.conf.%m

# Options for using winbind. Winbind allows you to do all account and
# authentication from a Windows or samba domain controller, creating
# accounts on the fly, and maintaining a mapping of Windows RIDs to unix uid's
# and gid's. idmap uid and idmap gid are the only required parameters.
#
# winbind separator is the character a user must use between their domain
# name and username, defaults to "\"
; winbind separator = +
#
# winbind use default domain allows you to have winbind return usernames
# in the form user instead of DOMAIN+user for the domain listed in the
# workgroup parameter.
; winbind use default domain = yes
#
# template homedir determines the home directory for winbind users, with
# %D expanding to their domain name and %U expanding to their username:
; template homedir = /home/%D/%U

# When using winbind, you may want to have samba create home directories
# on the fly for authenticated users. Ensure that /etc/pam.d/samba is
# using 'service=system-auth-winbind' in pam_stack modules, and then
# enable obedience of pam restrictions below:
; obey pam restrictions = yes

#
# template shell determines the shell users authenticated by winbind get
; template shell = /bin/bash

# 5. Browser Control and Networking Options:
# Most people will find that this option gives better performance.
# See speed.txt and the manual pages for details
socket options = TCP_NODELAY SO_RCVBUF=8192 SO_SNDBUF=8192

# Configure Samba to use multiple interfaces
# If you have multiple network interfaces then you must list them
# here. See the man page for details.
; interfaces = 192.168.12.2/24 192.168.13.2/24

# Configure remote browse list synchronisation here
# request announcement to, or browse list sync from:
# a specific host or from / to a whole subnet (see below)
; remote browse sync = 192.168.3.25 192.168.5.255
# Cause this host to announce itself to local subnets here
; remote announce = 192.168.1.255 192.168.2.44

# set local master to no if you don't want Samba to become a master
# browser on your network. Otherwise the normal election rules apply
; local master = no

# OS Level determines the precedence of this server in master browser
# elections. The default value should be reasonable
; os level = 33

# Domain Master specifies Samba to be the Domain Master Browser. This
# allows Samba to collate browse lists between subnets. Don't use this
# if you already have a Windows NT domain controller doing this job
; domain master = yes

# Preferred Master causes Samba to force a local browser election on startup
# and gives it a slightly higher chance of winning the election
; preferred master = yes

# 6. Domain Control Options:
# Enable this if you want Samba to be a domain logon server for
# Windows95 workstations or Primary Domain Controller for WinNT and Win2k
; domain logons = yes

# if you enable domain logons then you may want a per-machine or
# per user logon script
# run a specific logon batch file per workstation (machine)
; logon script = %m.bat
# run a specific logon batch file per username
; logon script = %U.bat

# Where to store roaming profiles for WinNT and Win2k
# %L substitutes for this servers netbios name, %U is username
# You must uncomment the [Profiles] share below
; logon path = \\%L\Profiles\%U

# Where to store roaming profiles for Win9x. Be careful with this as it also
# impacts where Win2k finds it's /HOME share
; logon home = \\%L\%U\.profile


# The add user script is used by a domain member to add local user accounts
# that have been authenticated by the domain controller, or when adding
# users via the Windows NT Tools (ie User Manager for Domains).

# Scripts for file (passwd, smbpasswd) backend:
; add user script = /usr/sbin/useradd -s /bin/false '%u'
; delete user script = /usr/sbin/userdel '%s'
; add user to group script = /usr/bin/gpasswd -a '%u' '%g'
; delete user from group script = /usr/bin/gpasswd -d '%u' '%g'
; set primary group script = /usr/sbin/usermod -g '%g' '%u'
; add group script = /usr/sbin/groupadd %g && getent group '%g'|awk -F: '{print $3}'
; delete group script = /usr/sbin/groupdel '%g'

# Scripts for LDAP backend (assumes nss_ldap is in use on the domain controller.
# Needs IDEALX scripts, and configuration in smbldap_conf.pm.
# This assumes you've installed the IDEALX scripts into /usr/share/samba/scripts...
; add user script = /usr/share/samba/scripts/smbldap-useradd.pl '%u'
; delete user script = /usr/share/samba/scripts/smbldap-userdel.pl '%u'
; add user to group script = /usr/share/samba/scripts/smbldap-groupmod.pl -m '%u' '%g'
; delete user from group script = /usr/share/samba/scripts/smbldap-groupmod.pl -x '%u' '%g'
; set primary group script = /usr/share/samba/scripts/smbldap-usermod.pl -g '%g' '%u'
; add group script = /usr/share/samba/scripts/smbldap-groupadd.pl '%g' && /usr/share/samba/scripts/smbldap-groupshow.pl %g|awk '/^gidNumber:/ {print $2}'
; delete group script = /usr/share/samba/scripts/smbldap-userdel.pl '%g'


# The add machine script is use by a samba server configured as a domain
# controller to add local machine accounts when adding machines to the domain.
# The script must work from the command line when replacing the macros,
# or the operation will fail. Check that groups exist if forcing a group.
# Script for domain controller for adding machines:
; add machine script = /usr/sbin/useradd -d /dev/null -g machines -c 'Machine Account' -s /bin/false -M '%u'
# Script for domain controller with LDAP backend for adding machines (You need
# the IDEALX scripts, and to configure the smbldap_conf.pm first):
; add machine script = /usr/share/samba/scripts/smbldap-useradd.pl -w -d /dev/null -g machines -c 'Machine Account' -s /bin/false '%u'

# Domain groups:
# Domain groups are now configured by using the 'net groupmap' tool

# Samba Password Database configuration:
# Samba now has runtime-configurable password database backends. Multiple
# passdb backends may be used, but users will only be added to the first one
# Default:
; passdb backend = smbpasswd guest
# TDB backen with fallback to smbpasswd and guest
; passdb backend = tdbsam smbpasswd guest
# LDAP with fallback to smbpasswd guest
# Enable SSL by using an ldaps url, or enable tls with 'ldap ssl' below.
; passdb backend = ldapsam:ldaps://ldap.mydomain.com smbpasswd guest
# Use the samba2 LDAP schema:
; passdb backend = ldapsam_compat:ldaps://ldap.mydomain.com smbpasswd guest

# idmap uid account range:
# This is a range of unix user-id's that samba will map non-unix RIDs to,
# such as when using Winbind
; idmap uid = 10000-20000
; idmap gid = 10000-20000
# LDAP configuration for Domain Controlling:
# The account (dn) that samba uses to access the LDAP server
# This account needs to have write access to the LDAP tree
# You will need to give samba the password for this dn, by
# running 'smbpasswd -w mypassword'
; ldap admin dn = cn=root,dc=mydomain,dc=com
; ldap ssl = start_tls
# start_tls should run on 389, but samba defaults incorrectly to 636
; ldap port = 389
; ldap suffix = dc=mydomain,dc=com
; ldap server = ldap.mydomain.com
# Seperate suffixes are available for machines, users, groups, and idmap, if
# ldap suffix appears first, it is appended to the specific suffix.
# Example for a unix-ish directory layout:
; ldap machine suffix = ou=Hosts
; ldap user suffix = ou=People
; ldap group suffix = ou=Group
; ldap idmap suffix = ou=Idmap
# Example for AD-ish layout:
; ldap machine suffix = cn=Computers
; ldap user suffix = cn=Users
; ldap group suffix = cn=Groups
; ldap idmap suffix = cn=Idmap


# 7. Name Resolution Options:
# All NetBIOS names must be resolved to IP Addresses
# 'Name Resolve Order' allows the named resolution mechanism to be specified
# the default order is "host lmhosts wins bcast". "host" means use the unix
# system gethostbyname() function call that will use either /etc/hosts OR
# DNS or NIS depending on the settings of /etc/host.config, /etc/nsswitch.conf
# and the /etc/resolv.conf file. "host" therefore is system configuration
# dependant. This parameter is most often of use to prevent DNS lookups
# in order to resolve NetBIOS names to IP Addresses. Use with care!
# The example below excludes use of name resolution for machines that are NOT
# on the local network segment
# - OR - are not deliberately to be known via lmhosts or via WINS.
; name resolve order = wins lmhosts bcast

# Windows Internet Name Serving Support Section:
# WINS Support - Tells the NMBD component of Samba to enable it's WINS Server
; wins support = yes

# WINS Server - Tells the NMBD components of Samba to be a WINS Client
# Note: Samba can be either a WINS Server, or a WINS Client, but NOT both
; wins server = w.x.y.z

# WINS Proxy - Tells Samba to answer name resolution queries on
# behalf of a non WINS capable client, for this to work there must be
# at least one WINS Server on the network. The default is NO.
; wins proxy = yes

# DNS Proxy - tells Samba whether or not to try to resolve NetBIOS names
# via DNS nslookups. The built-in default for versions 1.9.17 is yes,
# this has been changed in version 1.9.18 to no.
dns proxy = no

# 8. File Naming Options:
# Case Preservation can be handy - system default is _no_
# NOTE: These can be set on a per share basis
; preserve case = no
; short preserve case = no
# Default case is normally upper case for all DOS files
; default case = lower
# Be very careful with case sensitivity - it can break things!
; case sensitive = no

# Enabling internationalization:
# you can match a Windows code page with a UNIX character set.
# Windows: 437 (US), 737 (GREEK), 850 (Latin1 - Western European),
# 852 (Czech), 861 (???), 932 (Japanese),
# 936 (Simplified Chin.), 949 (Korean Hangul),
# 950 (Trad. Chin.).
# More detail about code page is in
# "http://www.microsoft.com/globaldev/reference/oslocversion.mspx"
# UNIX: ISO8859-1 (Western European), ISO8859-2 (Eastern Eu.),
# ISO8859-5 (Russian Cyrillic), KOI8-R (Alt-Russ. Cyril.)
# This is an example for french users:
; dos charset = 850
; unix charset = ISO8859-1


#============================ Share Definitions ==============================
[homes]
comment = Home Directories
browseable = no
writable = yes
# You can enable VFS recycle bin on a per share basis:
# Uncomment the next 2 lines (make sure you create a
# .recycle folder in the base of the share and ensure
# all users will have write access to it. See
# examples/VFS/recycle/REAME in the samba docs for details
; vfs object = /usr/lib/samba/vfs/recycle.so

# Un-comment the following and create the netlogon directory for Domain Logons
; [netlogon]
; comment = Network Logon Service
; path = /var/lib/samba/netlogon
; guest ok = yes
; writable = no

# Un-comment the following to provide a specific roving profile share
# the default is to use the user's home directory
;[Profiles]
; path = /var/lib/samba/profiles
; browseable = no
; guest ok = yes
# This script can be enabled to create profile directories on the fly
# You may want to turn off guest acces if you enable this, as it
# hasn't been thoroughly tested.
;root preexec = PROFILE=/var/lib/samba/profiles/%u; if [ ! -e $PROFILE ]; \
; then mkdir -pm700 $PROFILE; chown %u:%g $PROFILE;fi

# NOTE: If you have a CUPS print system there is no need to
# specifically define each individual printer.
# You must configure the samba printers with the appropriate Windows
# drivers on your Windows clients. On the Samba server no filtering is
# done. If you wish that the server provides the driver and the clients
# send PostScript ("Generic PostScript Printer" under Windows), you have
# to swap the 'print command' line below with the commented one.
[printers]
comment = All Printers
path = /var/spool/samba
browseable = no
# to allow user 'guest account' to print.
guest ok = yes
writable = no
printable = yes
create mode = 0700
# =====================================
# print command: see above for details.
# =====================================
print command = lpr-cups -P %p -o raw %s -r # using client side printer drivers.
; print command = lpr-cups -P %p %s # using cups own drivers (use generic PostScript on clients).
# The following two commands are the samba defaults for printing=cups
# change them only if you need different options:
; lpq command = lpq -P %p
; lprm command = cancel %p-%j

# This share is used for Windows NT-style point-and-print support.
# To be able to install drivers, you need to be either root, or listed
# in the printer admin parameter above. Note that you also need write access
# to the directory and share definition to be able to upload the drivers.
# For more information on this, please see the Printing Support Section of
# /usr/share/doc/samba-/Samba-HOWTO-Collection.pdf
[print$]
path = /var/lib/samba/printers
browseable = yes
read only = yes
write list = @adm root
guest ok = yes

# This one is useful for people to share files
;[tmp]
; comment = Temporary file space
; path = /tmp
; read only = no
; public = yes

# A publicly accessible directory, but read only, except for people in
# the "staff" group
;[public]
; comment = Public Stuff
; path = /home/samba/public
; public = yes
; writable = no
; write list = @staff
# Audited directory through experimental VFS audit.so module:
# Uncomment next line.
; vfs object = /usr/lib/samba/vfs/audit.so

# Other examples.
#
# A private printer, usable only by Fred. Spool data will be placed in Fred's
# home directory. Note that fred must have write access to the spool directory,
# wherever it is.
;[fredsprn]
; comment = Fred's Printer
; valid users = fred
; path = /homes/fred
; printer = freds_printer
; public = no
; writable = no
; printable = yes

# A private directory, usable only by Fred. Note that Fred requires write
# access to the directory.
;[fredsdir]
; comment = Fred's Service
; path = /usr/somewhere/private
; valid users = fred
; public = no
; writable = yes
; printable = no

# a service which has a different directory for each machine that connects
# this allows you to tailor configurations to incoming machines. You could
# also use the %u option to tailor it by user name.
# The %m gets replaced with the machine name that is connecting.
;[pchome]
; comment = PC Directories
; path = /usr/pc/%m
; public = no
; writable = yes

# A publicly accessible directory, read/write to all users. Note that all files
# created in the directory by users will be owned by the default user, so
# any user with access can delete any other user's files. Obviously this
# directory must be writable by the default user. Another user could of course
# be specified, in which case all files would be owned by that user instead.
;[public]
; path = /usr/somewhere/else/public
; public = yes
; only guest = yes
; writable = yes
; printable = no

# The following two entries demonstrate how to share a directory so that two
# users can place files there that will be owned by the specific users. In this
# setup, the directory should be writable by both users and should have the
# sticky bit set on it to prevent abuse. Obviously this could be extended to
# as many users as required.
;[myshare]
; comment = Mary's and Fred's stuff
; path = /usr/somewhere/shared
; valid users = mary fred
; public = no
; writable = yes
; printable = no
; create mask = 0765

Calculate Probablities

 Probability Theory and the Market

Now, let us move away from the racetrack and pull all this together into the rality of the stock market. The chain of thinking is the same.

• Calculate probabilities. This is the probability you are concerned with: What are the chances that this stock I am considering will, over time, achieve an economic return greater than the market?
  
• Using frequency if it is available, and subjective interpretation if it is not, make your best estimate. Do the most thorough job you can of collecting and analyzing information about the company, and convert your analysis to a percentage number. That number represents how obvious it is to you that the company is a winner.
  

• Adjust for new information. Knowing that you are going to wait until the odds turn in your favor, pay scrupulous attention in the meantime to whatever the company does. Has management begun to act irresponsibly? Have the financial decisions begun to change? Has something happened to change the competitive landscape in which the business operates? If so, the probabilities will likely change.
  
• Decide how much to invest. Of all the money you have available for investing in the market, what proportion should go to this particular purchase? Start with the Kelly formula, then adjust it downward, perhaps by half.
  
• Wait for best odds. The odds of success tip in your favor when you have a margin of safety; the more uncertain the situation, the greater the margin you need. In the stock market, that safety margin is provided by a discounted price. When the company you like is selling at a price that is below its intrinsic value, that is your signal to act.
  

Thinking about probabilities may be new to you, but it is not impossible. If you are able to teach yourself to think about stocks in this way, you are well on your way to being able to profit from your own lessons. An opportunity such as Coca-Cola in the late 1980s (an outstanding business priced substantially below its intrinsic value) doesn't happen often. But when it does occur, those who understand probabilities will recognize it and know what to do. As Charlie Munger puts it, "The wise (investors) bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don't. It's just that simple."

STOCK CALL:AWE

Date:As at 23-09-06
CURRENT PRICE:$2.63
AWE - worst case scenario - FY ending 08.
Extracted from MorganStanley:

WTI $40.00 (June 2008)
Production - liquids 3.5 million cf 7.0 million
Production - gas no change
Revenue from gas = 209 000 000
Revenue from liquids = 3 500 000 x 40.00 = 140 000 000
TOTAL REVENUE = 140 + 209 = 349 000 000

Assume cost is the same: $118 M (for other and general and CAPEX)
EBITDAX :349 - 118 = 231
MINUS exploration expenses :14 (231-14) = 217
EBITDA :217
Depreciation (28%) :217 - 60 = 156
EBIT :156
- INTEREST Expense :8 = (156-8) = 148
TAX (30%) :45 (148-45) = 103
NET OPERATION PROFIT :103 million
/ shares outsanding 446 000 000 = ESP= 23 cents

23/6.25 = $3.60 fair value for each share

__________________________________________

FY08E - changed revenue with following assumptions:

WTI $50.00 FY08 (June 2008)
Production - liquids 3.5 million cf 7.0 million
Production - gas no change
Revenue from gas = 209 000 000
Revenue from liquids = 3 500 000 x 50.00 = 175 000 000
TOTAL REVENUE = 175 + 209 = 384 000 000

Assume cost is the same: $118 M (for other and general and CAPEX)
EBITDAX :384 - 118 = 266
MINUS exploration expenses :14 (266-14) = 252
EBITDA :252
Depreciation (28%) :252 - 70 = 182
EBIT :182
- INTEREST Expense :8 = (182-8) = 174
TAX (30%) :52 (174-52) = 121
NET OPERATION PROFIT :121 million
/ shares outsanding 446 000 000 = ESP= 27 cents

27/6.25 = $4.20-4.35 fair value for each share

__________________________________________



WTI $45.00 from $56.5 (end June 2007**) (average price of OIL WTI at $45.00)
Production - liquids no change
Production - gas no change
Revenue from gas = 74,650,000
Revenue from liquids = 1 900 000 x 40.00 = 76 000 000
TOTAL REVENUE = 74 650 000 + 76 000 000 = 150 650 000

Assume cost is the same: $22 M (for other and general and CAPEX)
EBITDAX :150 - 22 = 128
MINUS exploration expenses :13 (128 - 13) = 115
EBITDA :115
Depreciation (28%) :115 - 32 = 83
EBIT :83
- INTEREST Expense :8 = (83-8) = 75
TAX (30%) :22 (75-22) = 53
NET OPERATION PROFIT :53 million
/ shares outsanding 446 000 000 = ESP= 11 cents

11/6.25 = $1.7-1.80 fair value for each share


*****************************************************************************************************
JUNE 06 QTR (shares on issue 446 million)
CLIFF HEAD OIL - awe share is total 98 991 (27.5%) barrels of oil (total is 359,967 for the quarter) (4.1million barrels)
TUI OIL FIELD - (28million barrels) AWE Share 42% or 11.76 Million Barrels Of Oil.

****************************************************************************************************
UPDATE

CLIFF HEAD OUTPUT

Sep06: 235,000
Dec06: 220,000
Mar07: 230,000Forecast
Jun07: 230,000Forecast
TOTAL for FY07 915,000

915,000 x US$50 = $45m x 1.32 = $60m revenue from CLIFF HEAD
$74 revenue from GAS
TOTAL $134m

Share Investing - Keep In Mind

INTELLIGENT INVESTOR XII

Ben Graham taught his students a great deal of "market psychology," as he considered the "temperament" of an investor as a critical aspect of success or failure. His first lesson focused on the difference between timing and pricing.

Stock prices rise and fall, so it is human nature to look for a way to profit from such volatility. There are two possible was to do so...
Timing-- to anticipate the rise and fall of the market and of the prices of individual stocks-- to buy or hold when the they are expected to rise, and to sell or refrain from buying when they appear to be heading down.
Pricing-- to buy stocks that are priced by the market below the fair value of the underlying business and to sell, or refrain from buying when they are priced above fair value.

Graham, a time-tested veteran of the stock market, was convinced that an intelligent investor could profit from focusing on pricing. He was equally convinced that anyone with their emphasis on timing, in the sense of believing their own (or others') forecasts, would end up as a speculator and be doomed to poor financial results over time. Despite the wisdom of such convictions, Graham also understood most would not listen... "As a matter of business practice, or perhaps of thoroughgoing conviction, the stock brokers and the investment services seem wedded to the principle that both investors and speculators in common stocks should devote careful attention to market forecasts."

This is certainly my observation yet today right here in the Singapore market. For example, I received the following e-mail from SIAS Research on 25 May 2006...

Celestial Nutrifoods-- Strategy: Trading Buy. Target: $1.60. This target is projected from the 61.8% retracement of the decline from $1.77 to $1.31. Stop loss below $1.30. While the trend for Celestial Nutrifoods is not attractive at all, the buying interests at its 38.2% golden ratio based on historical high ($2.10) and low ($0.18) seems to be high. Celestial Nutrifoods maybe due for a rebound if $1.37 manages to hold. The traded volume for the past few days remains high, we did not see this phenomenon when Celestial Nutrifoods approached the support at $1.61. If this situation continues for the next few days, it may invalidate the potential bearish flag formation. The traded volume of a bear flag should diminish as the formation matures, strong volume should not take place in a flag formation.

Well... one can picture Ben Graham rolling with laughter in his grave upon reading this, eh? Certainly this analyst can find wiggle room enough to say he was "right" no matter where the price of Celestial heads next. (For the record, after this "trading buy" recommendation, Celestial opened the next morning down 9c to $1.28, closed down 15c at $1.22... thus assuring a sure loss in a single day if one implemented the noted "stop loss" out.) Without the slightest apparent interest in Celestial's underlying business performance or promise, its balance sheet strength, management competence, or any interest in the Chinese soybean product industry, this analyst is content to burry his head in the mystical and magical price chart patterns in search of his fortunes.

Graham chided, "The farther one gets from Wall Street, the more skepticism one will find, we believe, as to the pretensions of stock-market forecasting or timing." With new predictions issued every day, one could hardly take them all seriously. Yet many people do pick and choose among the plethora of forecasts and act on them with their hard-earned money. Graham issued the following "logic warning" to those sheep...

If you, the reader, expect to get rich over the years by following some system of leadership in market forecasting, you must be expecting to try to do what countless others are aiming at, and to be able to do it better than your numerous competitors in the market. There is no basis either in logic or in experience for assuming that any typical or average investor can anticipate market movements more successfully than the general public, of which he is himself a part.

Graham further notes that the aspect of "timing" is of great psychological importance to the speculator because he wants to make his profit as fast as possible. The idea of waiting a year before his stock moves up is unthinkable. But a one-year waiting period for a business-focused investor is of no consequence. What this means is that timing is of no real value to the investor unless it coincides with pricing-- that is, unless it enables him to repurchase his shares at substantially under his previous selling price. For an investor, one that purchases only a sound business below its fair value, a further fall would not indicate need to secure a sure loss (stop loss, in timing lingo), but indicate an opportunity to increase his stake at a now even more attractive value (averaging down, in investor lingo).

Ben Graham doubted that any serious investor was likely to believe that day-to-day or even month-to-month fluctuations in the stock market would make him richer or poorer. But what about longer-term and wider changes over a period of years as the market rolls through bear and bull cycles? Once again, after looking at a great deal of market data and considering various formula approaches to buying and selling into cycles, Graham concluded that even long-term timing was unlikely to be profitable, at least not more profitable than simply buying and holding right through the ups and downs.


Business Valuations vs Stock-Market Valuations

The impact of market fluctuations upon the investor's true situation may be considered also from the standpoint of the shareholder as the part owner of various businesses. The holder of marketable shares actually has a double status, and with it the privilege of taking advantage of either at his choice. On the one hand his position is analogous to that of a minority shareholder or silent partner in a private business. Here his results are entirely dependent on the profits of the enterprise or on a change in the underlying value of its assets. He would usually determine the value of such a private-business interest by calculating his share of the net worth as shown in the most recent balance sheet. On the other hand, the common-stock investor holds a piece of paper, an engraved stock certificate (digital today), which can be sold in a matter of minutes at a price which varies from moment to moment-- when the market is open, that is-- and often is far removed from the balance sheet value.

The development of the stock market has made the typical investor more dependent on the course of price quotations and less free than formerly to consider himself merely a business owner. The reason is that the successful enterprises in which he is likely to concentrate his holdings sell almost constantly at prices well above their net asset value. In paying these market premiums the investor gives precious hostage to fortune, for he must depend on the stock market itself to validate his commitments.

This is a factor or prime importance in present-day investing, and it has received less attention than it deserves. The whole structure of stock-market quotations contains a built-in contradiction. The better a company's record and prospects, the less relationship the price of its shares will have to their book value. But the greater the premium above book value, the less certain the basis of determining its intrinsic value-- i.e., the more this "value" will depend on the changing moods and measurements of the stock market. Thus we reach the final paradox, that the more successful the company, the greater are likely to be the fluctuations in the price of its shares. This really means that, in a very real sense, the better the quality of a common stock, the more speculative it is likely to be-- at least as compared with the unspectacular middle-grade issues.

But not this important fact, says Graham: The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons' mistakes of judgment.

Incidentally, a widespread situation of this kind actually existed during the dark depression days of 1931-1933. There was then a psychological advantage in owning business interests that had no quoted market. For example, people who owned first mortgages on real estate that continued to pay interest were able to tell themselves that their investments had kept their full value, there being no market quotations to indicate otherwise. On the other hand, many listed corporation bonds of even better quality and greater underlying strength suffered severe shrinkages in their market quotations, thus making their owners believe they were growing distinctly poorer. In reality the owners were better off with the listed securities, despite the low prices of these. For if they had wanted to, or were compelled to, they could at least have sold the issues-- possibly to exchange them for even better bargains. Or they could just as logically have ignored the market's action as temporary and basically meaningless. But it is self-deception to tell yourself that you have suffered no shrinkage in value merely because your securities have no quoted market at all.

Andrew Beyer, columnist for the Washington Post and author of several books on thoroughbred racing, has spent many years watching racegoers bet and has seen far too many lose money through impetuosity. At the track, as elsewhere, the casino mentality-- the itch to get into the action: to put down the money, toss the dice, pull the lever, do something-- compels people to bet foolishly, without taking the time to think through what they are doing.

Andrew Beyer, columnist for the Washington Post and author of several books on thoroughbred racing, has spent many years watching racegoers bet and has seen far too many lose money through impetuosity. At the track, as elsewhere, the casino mentality-- the itch to get into the action: to put down the money, toss the dice, pull the lever, do something-- compels people to bet foolishly, without taking the time to think through what they are doing.