CPSX-CERAMICS PROCESS SYSTEMS Message Board

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Technology Stocks : CPSX-CERAMICS PROCESS SYSTEMS

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To: Juli who wrote (142)	6/27/2000 11:14:00 PM
From: GARY P GROBBEL	Read Replies (2) of 181

juli....it is very difficult to live with a situation wherein you may have brought a stock out in some manner around 1.00, and due to favorable factors watch it move to 3.00, take some or all of your profits (while reflecting at the time that you are really really good at this) then watch it go to 10 or 20 or 30 or 40 or 50. for better or worse (better when you think about it) that has happened to me more often than i would care to own up to. and if you FOCUS on what was left on the table you are already probably missing another stock somewhere else that you SHOULD be focusing on. there is another aspect to this. if if if a stock has really started a helluva run (and we only know that in retrospect)it will give you several entry point opportunities to get back in due to mkt conditions that are present in 90% of every stock run.. even the strongest stock runs back and fill as investors come and go based on their own particular portfolio dynamics. but the investor needs to realize that in most cases the first run they had with the stock was actually that part of the run where the risk was at the most favorable ratio ref reward. in other words each time you go back into that same stock after your initial exit the risk grows and the returns will probably diminish (there are exceptions but i have found this to be the general rule at least for me). primarily this is due to two factors...technical trends and investor psychology. as the stock becomes more widely known and thus traded the picture becomes more complicated due to increased exposure. the decision to initially load the boat at 1.00 is usually the easiest call to make. as you move up the ladder your risk grows (whether we realize it or not) and in some cases you will find yourself losing all your initial gain unless you are very careful. if i decide to go this route i usually commit much less than i took out after i cleared the boards. and if i can more or less remain in the stock as it continues to move the bets i make continue to diminish in terms of that initial payout AND and further gains....so as we move my exposure continues to drop but i am still 'in' the stock. it is a conservative approach but one that allows you to still be in 'your' stock if it turns out to be that one of 20 or 30 that really rocks the boat. and, at some point you just have to call it quits and move on because you are spending too much time on a diminishing return basis...other stocks are still back there at 1.00 waiting for you. in other words, i have the same problem you do<GG>. we all have basically the same problems whether it is the initial buy or sell, or how to play it when we are out and would rather be in. most of these problems are easier to resolve in terms of your profit/loss for the year if you are in the right stock in the first place. and THAT is what i would really like to write about...how to go about assembling a stock universe that will serve as base for sustained profitability, with an occasional rocket shot here and there. you only need 3 or 4 stocks to perform well each year to make the nut and pay the bills...the rest is yours and uncle sam's. gpg

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