clapper-
not to worry dude. if you'll recall, we were in the red for about two weeks last year when we bought on Oct. 1. we're only down 3% - no sweat. here's a little something i got in the mail from uncle fred today. i changed the name of his friend to Carl (she called everybody carl) to keep him anonymous:
I think I mentioned a buddy of mine that invests only four or five months a year, and makes big bucks, maybe we should all do that.
Anyway, for lack of something else to discuss, lets look at
how he does it, at least the way I understand he does it.
In September, October, and sometimes early November, he
does all his buying. Buys around $200,000 worth of stocks. He holds the stocks until the end of January, February, latest early March. Then sells everything and goes to all cash, sometimes he will put most of the
money in a 6 month CD, from March to August. Then when
September/October/early November comes around he will start
to buy again. Does this year after year. He said he never invests more than the $200,000, if he has a large overage left from taxes, and spending it goes into property, long term CD's, REIT's paying good interest, etc.
Does he make money, yes, more than I do, that is why I keep
thinking about it, however for a stock market 'junkie' like me that would be boring. Carl claims he has made at least $50,000 the worst year, and this last year made almost $300,000. He sold when the rest of us were caught up in the hype of stocks going higher and higher. Takes
guts to follow his system, but it works. Carl uses charts,
and yes, he is a member of the Underground, he only sends 'private' e-mails which tick me off some, but he is a private sort of guy.
I don't think he will care if I talk about his system, or the little I know about it.
He has found many of his stocks here, and looking back at
the charts of many of the stocks in my Trading Portfolio and the stocks in our Underground 'Select' portfolio I can see that if they where purchased last September/October and sold by the end of February he would have made a big killing. Stocks with a tradition of dropping in the fall
and raising in the January/February are prime contenders.
Also stocks down by some temporary situation, or just down for no reason at all.
Of course, Carl really has to have a set of (excuse me
ladies for the expression) "Brass Balls" as he is really doing the complete reverse of what everyone else is doing. While most are sitting, scared to death, watching their stocks go down and down. Carl is sitting there with cash, and having only one decision to make, "When is the stock ,
in his opinion, at or near it's low so he can buy." He
says that if a stock has dropped constantly, and then goes up a bit, or holds for few days, that is usually the time to buy. The stock may go down further, but usually not to far. He loves stocks with a patented technology, making money, or near to it. He is probably one of the
purest disciples of the "Buy low, Sell high" theory I
know.
Fearless, ---buying when folks are hiding and scared to
death, and selling when everyone is watching the market go up.
Smart, very smart indeed!
Selling is also tricky, he says if it is a very tiny BB or
Small Capital stock, he will usually sell half immediately if it doubles, even if it is only mid January. Then he knows he has his money back. The second the stock, back tracks for a few days, he sells the whole position never messes around. Also if he has a BB or Small Capital
stocks that has no movement by the third week of January he
sells no matter if he sells at a loss. He says if he has cash from the sale of a stock that went up fast, and another stock he likes has not started moving, and it is early in January, he sometimes will add to that stock. He generally like to do this with larger stocks, as he has the
protection of 'Stop Loss' orders.
The larger stocks that he can put 'Stop Loss Orders' under
he will keep, and just keep moving up the stop losses. Usually after they start to move he will give em a 20% amount of room from the current price to the 'Stop Loss' price, then as it gets later into February he will move this up to 10%.
He generally will spread his money over 15 to 20 stocks,
sometimes more, sometimes less. Carl says that is all depends on his confidence in his selections. If he has a strong feeling of confidence he will buy a lesser number of stock positions, and have more money ridding on each.
Why am I telling you all this? Especially since I don't do
it myself? (Not yet, but thinking about it.) Each of us should know the different methods of investing. Carl likes this method.
He watches stocks all the rest of the year, pays some big taxes, and gets readyfor the fall buying.
He also says investing only 4 or 5 months out of the year
is LESS 'stressful' he can relax all late spring and summer, not worry about the market. Hell, Carl is, HOPING, the market goes down in September, the more the merrier for him.
Oh, Well, it takes all kinds! Good luck Carl, you must be
having a wonderful time finding bargains this year. He has
purchased a bundle of ATTL, that I know.
Of course, this method, of investing, if profitable, is the
kind UncleSam loves. All the profits are short term and taxed.
looks like Carl's been reading my BISSI chart. <G>
best wishes,
-polvie |
