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Strategies & Market Trends : Z Best Place to Talk Stocks

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To: Kelvin Taylor who wrote (40608)	6/13/2002 7:47:48 PM
From: Joe Stocks	Read Replies (2) of 53068

>>> Ed, has the right id. scale in slooooowly and be mostly cash.<<< I disagree and here is why.... That system has no discipline and no criteria for entry other than a "gut" feeling. If we are truly in a secular bear market, buying stocks because of no other reason than we think they are cheap is doomed for failure in my opinion. In that same book I mentioned by Sy Harding, he lays out a systems for moving into the market during good and bad times. Those folks that have and use a system tend to outperform those that don't. I have a friend that is an investor of many years. i don't know his whole system but basically what he does is that he is only in the market when the S&P is trading over the 200dma. When it is under he is strickly in treasuries. He only invests in S&P index funds although he has been working with some etf's. Here is a 3 year chart for the S&P to see when it got him out. stockcharts.com[m,a]daclyyay[df][pb50!b200!f][vc60][iUb14!La12,26,9]&pref=G I'm not suggesting this plan but the guy has one and it serves him well. I still haven't heard a good reason for buying GLW, CIEN, ORCL or any other stock other than the wishful thinking that it will be higher in three years. Well what if you scaled in at every bottom of the last 73 and have no more money and stocks are headed lower. I'm not so sure that JDSU, CIEN, MANU and a host of others will still be around in 5 years. An extended economic contraction can be very brutal. Until we see the indexs moving ahead will we have even the faintest idea how brutal it will be. I just now see coming across the headlines that American Home Mortgage is warning. If the housing sector goes so goes the world in my opinion. Buy some gold. Here's another opinion. I see most talk on this board about stocks that performed well in past themes. I think it is important to look for stocks that support future investment themes. From 1987 to 1994 the average annual PE for INTC was 11.8. INTC is suppose to make 60 cents a share this year. If I told you I thought INTC could get down $7.08 a share you would say i was nuts. However, tell me why it can't get there. Tell me why it may just earn maybe 50 cents a share next year. Until you have a proven strategy with stoploss protection and sound discipline I don't think it is wise to "scale" into the market. Just my opinion....just my opinion.... BTW, I think Ed has me on "ignore". I would hope that he would read this and share his thoughts about this subject with me. Joe

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