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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: mauser96 who wrote (25430)5/27/2000 11:17:00 AM
From: Brian K Crawford  Read Replies (2) of 54805
 
Re TA
A more reliable way to judge overpriced markets is to look at the degree of speculation in stocks you don't own.

I have lurked around SI since '95, and noticed a definite positive correlation between stocks experiencing blowoff tops and the number of posts on a stock's message boards.

When the board you have been steadily reading for months or years has a sharp upward spike in posting volume, including lots of new names, it is a definite warning signal. I am not talking about a few new posts. I am talking about tripling or quadrupling the former daily average post count.

Or in the local lingo "thread bloat".

I don't know how to quantify this to any sell rules, but I do plan to watch for it in the future as an indicator of excess enthusiasm in stocks I own.

The harder part will be to avoid rationalizing away these indicators of excess. I have proven to be a proficient rationalizer. :-)

BTW, this indicator should work in reverse. If the G+K thread were a stock, it would be a buy here.

Brian
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