Gene: re: Oh, the woeful math of buying cyclical growth stocks!
Here's my strategy:
1. At the bottom, have 100% of my portfolio in AMAT.
2. Use up to a max of 1/2 of my equity to buy more on margin. This provides an adequate cushion, in case I start buying too soon. This time, I started buying at 34, and currently 1/2 of my portfolio is still in other stocks. So, I will still be able to buy more AMAT is it keeps going down.
3. As AMAT goes up ( beginning July 1998?), use the increasing equity to buy more on margin, but never above my limit, diversifying into other growth stocks that do not track with AMAT. Stocks like BSX, drug companies, CSCO, HD. Not any other semi or semi-equip stocks.
4. The plan is to be only 50% in AMAT when it becomes overvalued, and then either sell ( if I'm clever), or hold through the whole next downturn (if I miss the top). |
