*AV*--Thanks for positing this here. I am an avid reader of DWA and have seen this. when you look at the histogram and see the SEMI sector way over on the right in a location far removed from the other industry sectors on the histogram, you do not get a good feeling. When you add in the IBES Valuation Composite overbought condition (which Greenspan looks at), factor in the huge PEs that have grown from the single digits - 30X range to some way over 100, and a host of other things, you cannot ignore the statistics. Is this any different from the past? I do not think so, especially since more stocks got punished this quarter AFTER exceeding expectations on the street.
As you are keenly aware, what separates RadarView from the pack is our ability to predict the minor-major volatility cycles and take advantage of them prior to the herd rushing to the exit or entrance door. We made more than 8 cycles worth of profits since its inception and we were well out of many of these stocks prior to the temporary collapse. We were then able to buy back at decent discounts to start another cycle opportunity.
I am in full agreement with what you published here but I am not ready to say the roof is about to cave in. It really doesn't matter to us, based on our strategies and disciplines. We have made profits in both the up and down cycles for these market indices by recognizing this is a market of stocks and choosing the right ones at the right time.
A good example is probably VECO (off the top of my head). IT looks be where we first got involved in the stock more than 2 quarters ago. However, we did play this roller coaster numerous times to the point where the shares we own are "Free". That is, they were acquired solely on the profits made by accurately playing the cycles.
The LLT strategies we utilize create the requisite exits to preserve profits. Therefore, as much as we might be looking for a further correction or stagnation going forward, we can still cherry pick quality stocks and watch them create decent profits.
We felt bad 2 weeks ago when we had a new group of trial subscribers that came onboard during a reversal cycle we had called. All they saw were profits being taken. We extended their week long trial into this week since we had picked DSP as our "entry fee" stock to consider as the vehicle to pay for the subscription fees. We expected a payback in a few weeks to 2 months but it turned out that yesterday's pop produced the desired results. I guess we did not let them down. While we did not promise we would produce 3X-5X the fees, we did pointedly point out DSP as the prime vehicle to accomplish this task. Radarview delivered the goods once again.
So, as much as I am in full agreement with the DWA observations, the key is how we can make profits while anticipating the possibility for another pullback. I would hope you agree that our down to earth approach helps to preserve capital and invest in companies that are fundamentally sound and can perform even in the "worst of times". And as you know, our consolidated phase right now, concentrating on a handful of stocks and overloading on them, has paid off handsomely this week as we were able to get in a day or two prior to some nice advances.
Be careful about what we are being told in the DWA write up because it holds a great deal of validity. And as we said a few days ago,
THOSE THAT DO NOT PAY HEED TO HISTORY, ARE SURELY DOOMED TO REPEAT IT<ggg>.
Andrew
avance@radarview.com
PS - we have a slight departure in today's issue and I hope it is of value. |
