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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: tekboy who wrote (8071)10/11/1999 1:18:00 PM
From: pann1128  Read Replies (3) of 54805
 
Tekboy, UF,

Lot of energy expended on this thread on timing your buys for long term etc. I have a very simple suggestion for accomplishing this without too much heartache. First of all, this strategy will make sense if the investment account is not a retirement account and has margin capability. Of course we should have a generally rising stock market etc. So, here goes:

You are fully invested in all your Gorilla stocks all the time. Whenever there is a significant selloff, just add to your position using the margin capablity in your account. Once the stock or stocks recover, start selling off the newly added portion to reduce or eliminate margin. This will reduce your cost basis as you go. Of course you may incur short term gains in the process, but atleast you can go on lowering your cost basis. Your core position still stays put for long term gains. The important question here is what's a significant selloff. Eg. QCOM panic selloff to 150+ in the face of solid fundamentals. In general this could be a 10 to 20% correction in the overall market or sector or individual security. Again this has to be a holding you are confident is fundamentally sound.

A friend of mine has used this approach with great success.

Cheers,

Piyush
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