Just to point out the shortsightedness and missed opportunities that often can come from very short term trading...ie...VRTY...stock we mentioned on here as an example a few months back at 4 1/2ish...stock ran up recently and someone on here asked me if I would be selling in the 6, 6 1/2area. Yes I was, thinning out significantly. Anyway, stock has earnings Tues. Nite, loses 5 cents, stock pops a 3/4 of a dollar.
To make a case for momentum investing, which I DON'T believe in, I bot the thing at 4,5 and sat with it for a few months....sold at 6 1/2 and make 40%ish in the time period. A momentum investor would have waitied till it started picking up..., hopped on board at 6 when there was some action and sold at 8 perhaps for a 20% return in a few weeks, time adjusted, better than me. Then again the stock could be back to 5 and selling at 6 1/2 would have made you look like a genius.
Momentum investing has found many fans over the past few years given the markets strong move and departure from reasoned valuations. When bullishness fades to bearishness and people snap out of the haze that it appears we are in, in regard to valuations, you will probably see sme of the excesses get shaved from the market, mean serious pull backs on high fliers with momentum investors getting crushed.
Regards,
Steve@yamner.com |
