Todd: You have to remember that "Power Pitbull" candidates go up 90% of the time, whereas "Standard Pitbull" candidates go up 60% - 70% of the time. With the market fluctuating as it has and so many of the stocks being extended by Pitbull standards, Power picks are hard to come by. If you're going to go long, you'll have to settle for Standard Pitbull candidates. I've been able to eek out positive returns in the Standard picks over the past few weeks, but granted, they are still more volatile than normal in this market environment.
I also have owned VMC (+4.2% in 7-weeks), ALB (+7.1% in 4-weeks), & WBST (+5.9% in 4-weeks). If you are not following each stock, religiously checking for RS drops of 6-points from its HIGHEST RS during your holding period, you are probably commiting the cardinal Pitbull sin. My experience tells me that this component of the strategy is the MOST innovative and important of Henry's findings. If you ignore RS stops, you should probably move on to another strategy. Also, I recommend using trailing stops as outlined in Henry's manual. (I've noticed yesterday while looking at his Friday website report that he uses an 8% trailing stop on stocks priced above $50 rather than 10%.) I update my trailing stops DAILY, while the manuals recommend WEEKLY. The RS stops, I update WEEKLY. You must implement a solid sell strategy because although this system is less risky than some growth strategies, it is still CANSLIM-oriented and therefore more vulnerable to significant losses than a value-oriented approach.
I haven't checked my results in the past couple of months, but from April 1997 to about July 1997, my returns averaged +6.0% per pick with an average hold period of 5.5 weeks.
I welcome you to this site and look forward to your observations, questions and contributions. Don't be put off by the simplicity of the system. Paper-trade it until you've proven to yourself that it works.
John |
