aj: the reasoning you're questioning perhaps has to do with different time frames of reference than yours, and a self-recognized character flaw in myself.
I'm not a daytrader or even, really, a swing trader. I think in "seasons", so to speak. I bought a tranche of QQQ just above the sept. lows the other day. I have bids in for further tranches at QQQ 25.25, 23.77, and 22.05. Each tranche of shares gets larger as the price gets lower. $ cost averaging, as it were. I have the resources to continue this process down to about QQQ 16.0
If my current bids all get hit, which I doubt but don't completely disbelieve, I'll have a cost basis less than $23.60, which will correspond roughly to compx 1340. I have some expectation that we will go back up to test the 1696 level within the next 2 months. If we do, I'll have a profit of apprx $9.00/shr. I could live with that.
The character defect I referred to above is an inordinate fear of buying at the top, so I don't like to buy things that are already running strongly. I recognize that I'm not very good at picking bottoms, tops, or turns, so I seek methods that don't require me to do so. When I see a lot of the sort of bearishness expressed in your post, I start accumulating a contrary position. When you and many others begin singing "to da moon, alice", I start to lighten up and accumulate a short position. I'm very happy to give up the 25% at the bottom and the 25% at the top and reap the 50% in between. It allows me to sleep better and devote more of my attention to pursuits that I enjoy more.
Good Luck! |
