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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Tom Trader who wrote (22239)4/4/2000 10:24:00 PM
From: porkbay  Read Replies (1) of 54805
 
Re; hedging portfolios
Although hedging has its uses, my understanding of LTBH is that timing and leverage are to be used sparingly since both can induce sleepless nights. That being said, however, I am a believer in setting certain goals and markers as guidelines for thinking about buying and selling.
As an example, today I would think about selling stocks when the Nas has moved back up around the 5000 mark. When it does, I would take a good look at my portfolio and do some pruning to build up some cash balances. At that point I would also start to think about adding to winners at the next downturn, when a target stock has dropped some 20% or more from its high.
I am able to look at today as a buying opportunity and at the market last month as a selling opportunity because I am confident of two things-that the underlying conditions are solid and that the market is subject to these rapid runs in both directions.
J P Morgan, when asked what the market would do, looked down his long, red nose and muttered "It will fluctuate".
Be warned-when the economy goes bad (see the 1970s), all bets are off.
By way of disclosure, I use margin for leverage and may have an occasional bout of insomnia but my gorillas only rattled their cages today.
Porkboy
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