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Strategies & Market Trends : Z Best Place to Talk Stocks

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To: Susan Saline who wrote (20905)	10/4/1999 10:06:00 PM
From: kendall harmon	Read Replies (1) of 53068

As someone who "lurks" on this thread and bottom fishes big time, let me strongly agree with Susan at this point. When you are playing bounces the time of year and the overall market environment matter a great deal. This same "lack of bounces" happened last year in the October-December time period as well. October fear and tax loss selling go part of the way toward explaining the answer. The other dynamic which enters in is what I call the multiple disappointment factor. Often when a stock has been doing well and there is a single muff up analysts tend to be more forgiving. If it happens repeatedly, however, there is a loss of confidence in management. This is what happened clearly in the case of AVP. In order to play it, one has to adjust his or her strategy in the light of it. You can either seek to play the bounces in a more medium term way (in which case you can also average in if you do not catch the exact bottom) or you can wait longer to enter a falling stock. MAT on Friday was a good example. The Faber report clobbered the stock, and yet today it really got hammered. Sometimes waiting 2-4 days is a good solution.

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