Leo,
Welcome to the thread. Please feel free to post about your approach, positions, aspirations, etc.
You are right in thinking that I don't care much about the fundamentals, at least if they aren't already showing in the charts--then I'm happy to have the fundamentals on my side. However, I do keep lists of canslim stocks and IBD 100 stocks to screen and filter and think about.
I don't want to mislead you on the subject of filters. I am not scientific in my approach (how could I be, since I majored in English and Romance Languages in college?) but what I look to are price and volume. I want to see a stock showing unusual volume. In price I like to see either a steady northeasterly trend or a basing pattern I can believe in (see O'Neill's cup & handle, bowl bottoms, or Adam and Eve, Adam and Adam, Eve & Eve, etc.). I often filter a small group (watchlist in TC parlance) by things as simple as optionability, or price.
But often stock suggestions come to me by serendipity, and I am always open to that if the chart confirms. Two examples: First, OMG came to my attention in late 02 when it was trading at $4 or so. A generous poster had a good fundamental story about the price of cobalt and the inevitable rise of OMG. I thought it was a nice story but I couldn't tell you the difference between cobalt and basalt, nor could I tell you what the $#@% cobalt might be used for except as an adjective preceding "blue" in describing Van Gogh's choice of colors in the Arles years. So I bought a few times and then harvested 40-60% profits when the stock seemed to top out. Later I liked the basing pattern and bought again at 15 and 17, and picked up options once and sold and now have options again.
All because one guy took the time to post, here, his view on cobalt.
Second, a guy on the BZH thread (Yahoo) had a view on a stock which was in reality a collection of AMR bonds, rolled up into an entity which trades, AAR. I bought it 3 times, my lowest at about $4. The promise of AAR is, if AMR doesn't go bankrupt, it will pay out $1.97 per year in dividends AND repay $25 per share in principal at the end of its life. My investment at $4.05 has now paid me $1.97 in dividends and risen 359.51% at last count. When it pays off (at long term capital gains rate) I will have a gain of 517.17% in addition to years of dividends at a handsome 48.6% annual rate. I mentioned AAR on this thread a few times at about the $8-10 level, but don't really pound the table on things I'm in since I don't want to feel responsible for others investments, especially if I am wrong, and I been wrong, you could look it up.
Anyway, sorry to get off track. My current philosophy of speculating is two part: first, KISS, keep it simple and speedy. When I buy options I don't do calendar spreads, debit butterflies, credit ratio straddles or anything like that. I take a view (OMG is going to $30 in the next 3 months) and lob in a lowball bid for ITM options based on the likely low in the channel that OMG could likely trade in the next 4-5 days. That's what harvested for me OMG April 22.5s at the bargain price of 2.05. I won't even look at these OMG options again until late February unless somebody buys them from me at $7.50 before then. If I am wrong and the stock is trading at 23 in early March, I will prolly sell them for a $1.50 or so loss and look for other opportunities.
Second, because I don't believe in methods or trading systems, I stay open constantly to new ideas. I don't dismiss things like Elliot Waves or Fibo webs or Gann fans, I actually enjoy reading about the various things people look at. I don't really know if the 5 wave up 3 wave down works, but I have noticed that stocks tend to trade in waves of some sort. I constantly gather ticker symbols (my spiral bound trading logs are 2 pages, the left side are simply ticker symbols, circled if the chart looks good, starred if the chart looks great, and the right page my trading records: sold XXXXX ONNN @ 6.45 (bot 5.56), sold XXXXX ASYT @ 16.34 (bot 16.45) . . .) which I then transfer into specialized watchlists, which then go through the grinder to make it to the buy list.
Anyway, as the writer once said, sorry to have given you such a long letter, but I didn't have the time to write you a short one,
Kb |
