Dear Edamo,
And All,
I haven't been on SI for a while and when I looked yesterday and saw people still buying stocks with no earnings I was astounded.
Here is what I learned from last year:
l. When you have "critical mass" (all you need) get out: the market is not a "safe" place for your money.
2. When the charts show that your stocks are going down, believe it.Don't wait for them to "come back".
3. When the charts show the index(indices) are going down, believe it; if you have profits get out or protect them with dim covered calls.
4. When your trades result in losses day after day, stop and get out. Either you don't know what you are doing or the market is too brutal for you.
5. When Greenspan talks, listen. When he raises rates, assume the worst and take profits and get out.
6. There are "bear market" stocks: the "bear book" tells you what they are. Stocks like EPG, MO, RJR, DUK are actually holding their own or (horrors) going up! They also give you a dividend.
7. If you make a lot of money take some of it out of the risk area and put it in CD's or Ginnie Maes.
8. When you get "brave" enough to put your money into the market again look for EARNINGS! It was declining earnings that drove stock prices of our favorites to the ground. Look at atml, irf, brks, etc: stocks whose P/E is BELOW their growth rate.
9. If you want to risk your money at least risk it in KREM or CCMP or stocks like that that have great growth rates, although their p/e is high.
I don't know if I'll ever be a multimillionaire again. I assume I will be a millionaire again in the next couple of years but it will be slower because I can no longer put everything at risk....
Best wishes, and very very good luck to all.
Freeus |
