Ron, I'm sorry if you find my tone offensive. As for dogmatic, it seems to be the other way around. I've repeatedly said that there is no credible evidence favoring TA. If there is, not only will I publicly recant, but I will immediately devote all of my energies to learning the method. In other words, I am willing to be persuaded based on evidence. Can you honestly say the same?
So, I will take you up on the challenge. Since January 1, I bought two stocks: GLM at about (I believe $23.50 -- sorry, can't remember exactly) and HBOC at $46.
My rationale is to buy high quality growth stocks and to hold them for as long as the long-term growth prospects remain intact. In 1996, my portfolio increased about 38%, and in 1997 it was up about 42%. These numbers include transaction fees but do not include taxes. I am currently considering selling CA and using the proceeds to increase my position in ESV and PSFT because I'm not sure what the future of the mainframe market looks like (CA is dominant there). If I decide to sell CA here is the math: I bought in March 1995 at a split-adjusted price of about $16. The stock is currently trading at about $55. Assuming 18% LTCG I will net approximately $48. On an annualized rate, this would be a 47.4%.
As of today (as I write this), my portfolio after taxes and transaction fees is up 13.64% since January 1.
Growth stocks have high betas, meaning that they are intrinsically volatile. So, if you adopt this method of investing you need to be prepared for a roller-coaster ride. Techs were particularly hard hit during the beginning of '97 and toward the end of the year. With the exception of these past few days, the entire oil service sector has been terrible since the beginning of November. If you don't get pushed into selling based on the prevailing emotions of the period you will come out a winner over the long run.
So what have you bought and sold during the beginning of the year? How has your portfolio behaved? |
