It took me over a year to become "comfortable" with my analysis. Interestingly, it was a year of extreme dichotomy in the stock market. During 1999 the majority of stock were flat, at best, while a handful of tech stocks got caught in a mania. On top of that was the Y2K scare stirring up the mix. When I first got involved in making my own investment decisions, early last year, I lost some money. I got frustrated and rattled and pulled my money out of the market. I than spent many hundreds of hours studying various "timing" techniques, which are really nothing more than risk management tools (as are options). I finally emerged, after immersing myself in TA, confident enough to begin investing again. IFMX was my first choice (based on TA and FA) but I was still not confident enough in my work to play it unhedged. Thus I sold calls upon purchasing the stock. What I had done was time the bottom very well and immediately "sold" at an exceptable profit (which I get to pocket immediately). Since then I have been working on refining the techniques. I find bottoms easier to assess than local tops but am making some progress there as well. I am finding that familiarizing myself with a helpful of companies is easier to deal with than trying to analyze too many companies.
I have put on a handful of positions since then, which are either flat or modestly up (35% in 6 months), even during the current selling climate. Most importantly, I am comfortable with my choices and my progress. Are there guys out there making more money than me? Yup! But, I know I will do well with my investments, which gives me peace of mind. Can I claim bragging rights like the dot com investors had over the last couple of years? Nope! But, I think going foward will be a lot more fun and profitable. I am still not very heavily invested but, I look foward to coming buying opportunities. I find TA is a good noise filter. It also lets you set unemotional goals and limits. Actually, that is not exactly true. I no longer set goals for price objectives on my stock, but rather, I look for certain behavior to exit a stock. It is based on trying to identify capitulation, therefore I can not know before hand at once price capitulation will occur. But, TA helps identify likely points to look for signs of capitulation, either buying (the point at which a stock must be purchased) or selling (the point at which a stock must be sold). |
