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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (40566)12/14/2010 1:31:54 AM
From: Shane M  Read Replies (2) of 78759
 
Hi Paul - it's been a long time ...,

I'm probably taking liberties, but my reading of Greenblatt didn't necessarily seem to preclude shorter holding periods. I've seen studies showing good results with shorter term rebalancing also using Magic Formula approach (1 month) - although I've tried trading on 1 month windows and it's a bit much I think. There's not enough "better" new ideas that come up in such short term time frames. 2-3 months seem to be a timeframe that creates enough new opportunities to me.

I came to 2-3 month holding periods recently after several trades over the summer trading moves in stocks like KMB, JNJ, WMT, PEP, MSFT and few others - just moving capital from one to another based on price action. The big blue chips just seemed so cheap to me, but at the same time I realized they hadn't gone anywhere in 10 yrs so I didn't want to commit long term. Trading the rolling waves in price action and picking up dividends here and there seemed to make sense to me in that environment. (For example ABT is looking to shape up for a short term trade right now following that same approach - I probably should pull the trigger on it. CHL is one I just entered for similar reasoning). To a degree MSFT and INTC are in that same boat, although more PE expansion makes sense to me with limited downside in both of the latter.
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