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Technology Stocks : Dell Technologies Inc.

DELL 133.20

+5.7%

Nov 26 3:59 PM EST

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To: willcousa who wrote (157147)	5/13/2000 4:45:00 PM
From: Richard Habib	Read Replies (2) of 176387

The simplistic opinion that buy and hold is the most valid strategy is an artifact of the strong bull market we've been in. The reality is more nuanced. Likewise those that use simplistic trading tools such as oscillators would probably find useful an analysis of how often such tools provide no benefit whatsoever. The Encyclopedia of Technical Market Indicators by Colby and Meyers is a volume that provides computer backtesting of many, many trading strategies including buy and hold (passsive strategy). In 19 year backtests of the passive strategy, return was obviously dependent on the time period chosen. But since the market has had a strong bullish bias, the vast majority of timing methods have underperformed - but not all. If you assume the strong bullish bias will continue for the length of your investment horizon, then perhaps the passive strategy is the best choice. Complicating factors though, include your level of capitalization, ability to take draw downs and use of margin. We are in a rare period of tremendous volatility. Since these periods are so infrequent, no one has performed and published to my knowledge the testing to indicate which system provides the most profit. It is not unreasonable to assume though that passive strategies suffer more than timing strategies in this environment. I have done some backtesting using Windows on Wall Street software over the last 3 year and found that if you recognize qualitatively different market environments (The breaks in 98, late summer of 99 before the Oct 25 commencement of the runnup and this current period), a mixed strategy of passive and timing is the most effective. While buy & hold seems to be an archetype in the market. Another just as important archetype is never fall in love with a stock.

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