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Strategies & Market Trends : Rande Is . . . HOME

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To: Bucky Katt who wrote (32155)8/15/2000 12:15:59 PM
From: Rande Is  Read Replies (1) of 57584
 
. . . . . . . .On Rat Dog / Timing Plays. . . . .

Thanks, William. Your views on micro-caps are always very welcome. . .as are your market views, etc.

I just keep loading the boat. . .

To all. . . .

For those that don't understand. . .let me explain. If the markets go up 20% from here to the end of the year. . . then the tide will raise all boats roughly 20%. But when we see as little as 1 week worth of mania, the tiny forgotten about stocks often suddenly get snatched up. . . quite often news is released in conjunction to the momentum and POP! It is not unusual to see the 80% overnight gain like we did in HEAR. . . or 100% gains. . . or more. In the heat of mania, we were seeing 500%, 1000% and more gains on a regular [often daily] basis. I doubt we'll see that mania return. . .and I believe that there have been safeguards added to the system to assure these rocket gains just don't happen as they once did.

But just 3 or 4 gains of 50%, 100% or 200% on a micro-cap can really give a boost to a portfolio. . . and the beauty is that we are buying them [quietly and individually] at well-established support levels. . . so the risk is greatly reduced. A small portfolio percentage amount that sits in one of these Rat Dog/Timing Plays can bring sizeable gains to a port on a day where the markets are lower. . . making quite a difference.

Our natural tendencies are to find stocks between 10 and 50 that could move up sharply. And they might. .. . but all too often the biggest gains are made by either the leaders of a sector. . .that just keep defying gravity beyond all reason. . . .or by the micro-caps that suddenly get news or attention that place them in the limelight with their low float. . .

Of course with micro-caps. . .the whole purpose in buying at the bottom is to sell into the mania . . .since the vast majority of the time such stocks will pull back sharply after a run. . .giving opportunity to reload lower if there is still reason to believe there are more pops on the horizon. But again, we buy these for the purpose of selling them on the sudden bursts . . .on news or whatever.

This strategy, though tried and true. . .is primarily a phenom of the HOME thread and Rat Dog threads. If performed correctly, it can be an artform. My feeling is that there are certain "best times" of the year for buying various priced dogs. . . and hear in mid-August is as good a time as I've seen for picking up these little bargain pigeons. . . . for the purpose of selling them when they pop in September, October, November or December.

Note: These are not the sort of stocks to buy after they have risen 100%. . . . that is where we plan to start selling them just as slowly as we bought them . . .all part of our trading strategy.

Rande Is
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