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Technology Stocks : All About Sun Microsystems
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To: JC Jaros who wrote (25729)1/4/2000 9:43:00 PM
From: fuzzymath   of 64865
 
Very funny response, JC! I studied the "January Effect" and determined that it is really a November-January effect. Those months have had 50% of the market's annual gains since 1968 (using NYSE Index as the market indicator). The Feb-Oct period has puny gains on a monthly basis by comparison.

I went into cash way early this year only because the stupid markets have been diverging like crazy in the past few months (NASDAQ rocketing, NYSE basically flat, bonds falling) -- and having made a very nice 2 months (Nov-Dec) profit in my NASDAQ clone FDEGX, I decided given the uncertainty suggested by today's 5.5% NASDAQ drop, why not take the profits (my wife likes them as they are right now) and return to my normal short-term trading style (the one I display daily on my web site).

I AM conservative. I hate dips. Between now and November I'll be buying when my models see an upturn and switching to cash when they see risk (like now).

My recipe for the very conservative is to buy a broad market mutual fund on October 31 and sell it on January 31. Since 1968 that would have given you a very nice and safe return well above the return on bonds but without much of the risk of owning stocks 100% of the time.

Be assured, I'll own stocks most of the time between now and October--just not tomorrow, and maybe not for a few weeks if today's trend continues.

You are right about the cost of transactions, though. Short-term methods can only work if your percent loss through transaction costs is minimal. That's not the case for most people. Which is why buy-and-hold is my second favorite strategy.

Kevin
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