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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: kumar who wrote (43921)6/26/2001 8:05:09 AM
From: Stock Farmer  Read Replies (1) of 54805
 
Kumar - I will however draw you a counter-strategy that is still advantageously long term, buy & hold - based on a fraction of regular cash flow.

How about every so often taking out a mortgage that is within cash-flow carrying capability for the next 6-24 months and allocate this infusion of capital to a portfolio of equities. Each one carefully chosen from a list of "good companies".

Then, week after week, contribute a fixed amount to paying off the mortgage. Theory: there are always some great bargains out there.

This is identical in cash flow characteristics to an employee savings plan or a DCA approach. Where it differs is the selection of equities. The thought process isn't "This is a great company, I think I'll buy some, how much can I buy". It is "What is the best possible return I can attract today, and what is the best way to achieve it".

When market conditions are terrible as they have been for the last 12 months, one can always build up more cash for later.

John.
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