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Strategies & Market Trends : Z PORTFOLIO
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To: Kelvin Taylor who wrote (7442)5/2/2002 8:40:01 AM
From: DanZ  Read Replies (2) of 11568
 
I understand your point. My point is why would I post a sale for the Z portfolio when I was buying at the same price in my own account? That doesn't make any sense.

<do you buy more @ 9 or take the loss? what happens @ 8.75 or 8?>

I'll let you know what I do if it and when it gets there.

<I'm referring to the Z port here, not personal holdings.>

What's the difference? I generally have the same position in both accounts although I trade my own more frequently.

<a bottom occurs when confidence in the economy and company profits happens.>

I disagree. A bottom occurs for several reasons. Three reasons that come to mind are when demand exceeds supply, when sellers are exhausted, and when greed is stronger than fear. At any point in time, one group of people will have confidence in the economy and corporate profits and others won't. I don't even think it would be true to say that a bottom occurs when the majority of people have confidence in the economy. I would agree that stocks will rally when confidence in the economy increases, but I don't think it is necessary for the market to make a bottom. In fact, I would go as far as to hypothesize that the market makes a bottom when the majority of people don't have confidence in the economy and corporate profits. That is the point when fear is greatest and when sellers are exhausted.

<the Z is down over 13%. wonder why?>

The Nasdaq is down 14.7% over the same period. We are down primarily because of large losses in two open positions and one closed position. Stops wouldn't have helped if we lost money in the alternative position. To demonstrate, let's say that sponsor A buys ABCD and loses $500 on a stop out. They turn around and buy EFGH and lose $500 on a stop out. They use the funds to buy IJKL and lose $500 on a stop out. Sponsor B buys MNOP. He holds the stock through a decline and has a paper loss of $1500. Who lost more money?

To provide another perspective on our results, the next post contains a list of our 2002 trades sorted from highest loss to highest gain. I deleted the sponsor's name because it isn't needed to demonstrate my point.
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