Weekly Portfolios: Part 5 and Results Summary
A Word on Psychology and Analysis:
Trade dispassionately, mechanically. People fail in the markets because they buy on rumors or hype or opinion (including theirs) and not on basic logic and an honest assessment of the equity. There are no secret or magic methods - no single best indicator or software or data source. As one learns and becomes more competent and experienced they can acquire tools that aid in differentiating between one good buy and another, but it neve replaces the basics - only adds to them. And in reality it only adds to them if you understand them and us them correctly - no a simple task. Indicators drift, and markets change. Some tools work better for people based on their skills, inclinations and trading styles and objectives. Set yourself rigid guidelines to enter, to exit, and to pick a stock and follow them. Keep it simple and easy to manage. Don't think you can time or outguess or predict the market. And don't kid yourself that it is easy or fast or error free. And don't believe that anyone is always right or the best or flawless. Everyone will be wrong and everyone is right at times - but don't get depressed or angry or elated from it. I read every post here and encourage posting because even the most novice person can pick great stocks. I've never met anyone who can't make 100% a year in the market position trading. Only a 5% a month return generates an 80% return annually. A disciplined person can make 250% this way. But it takes diligence and a little work. I'm not going to kid anyone, though. To make 750% or more a year (about 20%/month) takes a lot more effort, skill and tools. And by the time one can do that, one tends to take greater risks and the cost and time becomes consuming.
One last caution:
The regular posters to this thread help narrow the field to search for stocks, but stay aware of their directions. Some are options players, some look for penny stocks, some for near term gainers, some short, and some for day trades. Nothing says a stock that is good for a day trader or option player isn't equally great for position trading. That is the value of a Watch List - it flags the possible opportunities from th poster's perspective. Whenever anyone ask about or posts a pick, the first thing I do is look at the daily chart. Even Jenna's and Copia's picks. And they look at the charts for mine. Screen your sources, both posters and data feeds critically. Do your own analysis on another's picks before you buy. Find stocks that you are comfortable with, and believe in yourself - but only to an 8% loss.
Weekly Portfolio: 1st Month (March) Results
Since all stock picks, entry limits, stops and market exits were posted one day prior to execution, and as all trade were made without the benefit of real-time or intraday trading, the results represent what anyone could have done last month. Stocks such as UTI, CPQ and FTPS made higher gains during the weeks, and end-of-day monitoring would have provided better total results. Although I did check on the stock prices more often than twice a week, I only made decisions about entering, exiting or adding to positions during the time allocated for that twice a week. I logged all time spent on this account to assure that it was manageable by most people. Moving stops more freqeuntly and entering at local minimums intraday would have profvided a couple of percent greater return. Also, some mistakes were made with exiting one stock too early, and picking another that never moved positive, and one that retrenched just after adding it. However, 9 of the 13 stocks stayed positive, and those that weren't were protected by the stops. Both good and bad luck played into the folio, but again, nothing anything other than more time may have prevented - and hat is doubtful. The results are:
Initial account: $35,000 on 3/2/98
Initial buy of 300 shares of 10 stocks:
CRUS, PNF, PFP, PXD, PEP, FONR, FTPS, PQT, UTI, & IPIC
Protective Stop filled for PNF, UTI, CPQ
Exited FONR and CRUS for no positive movement in 10-20 days
Took profit on: PEP, PXD, PFP, IPIC & FTPS
Added new tickers: IOM, VVUS, CPQ
Rebought: FTPS (looked strong), PNF (good buying range)
Added (shares) to: PQT, UTI, PNF (averaged down)
Shortest time any stock held: 3 days (PNF stopped out)
Longest time any stock held: 22 days and still long on PQT
Time spent picking stocks: 5 hours
(ok, so you might take more time, but the initial picking always takes
more time then adding to positions or new entry efforts.)
Time spent checking charts twice a week, resetting stops, etc.: 11 hours
Total time spent on account in 1 month = 16 hours
30 entry/exit trade commissions @ $15 = $450 (~1% of account total)
End of Month account value = $41,650 ($15,850 in stocks, $25,800 cash)
Prior to the UTI and CPQ stop exit this morning, there was only $860 in cash on the account.
$6650 profit = 19% actual gain in 22 days*
*Note: I don't believe in forecasting annualized % gains. The return will be what it is
at the end of this exercise. That the account was doing much better until today is also
immaterial, for the same reason. At any rate, we need a correction, and that and other
events will affect the account. But if you only do it 4 times a year, a 100% return is
pretty decent even after taxes.
I will look to add to existing holdings or add new stocks tomorrow or Thursday night.
If the market looks iffy I may wait until the weekend - that is after all one of the
advantages of Position Trading. Candidate stocks are listed in the next post under April Folio |
