Off Topic: Don and Joe, these boards are helping in developing a better investing style. In this recent purchase of AFLX, I was going to buy all I could with my cash and possibly even go on margin to play the trading range. I felt it was near it's low end of the trading range and was a safe bet. That was my first reaction.
I had set a rule for AFLX that I thought was a good indicator for a bottom on the stock. At the price I bought it didn't meet all my criteria (volume <400,000 and price jump up of 2points+), but I couldn't resist and bought anyway. A part of me knew I could have made a mistake based on the readings here. So I only went with a partial purchase, way less then what I was thinking of buying. I thought leave some cash in case the impossible happens, and 90% of the time for me the impossible does happen. That is it breaks through what looks like a very cheap price for a stock.
That famous scenario I buy it drops. It happens all the time. It's amazing and I think that happens because the market doesn't always trade on logic and facts. There is that unquantifiable part to investing that only long time experience or some extra sense has to be developed.
Not going full bore really saved me this time, because I got a margin call from my first purchase at 24 5/8. Again a good price at the time.
There I used a lot less margin as a precaution based on posts here at the boards.
My previous thoughts prior had always been, If you like a stock and are willing to commit to it, why not go all the way and maximize the rewards. But of course with the irrational parts to stock trading, you end up being in the hole just as quickly. Especially in a downward trend in the sector you are in. I do believe you have to take different approaches and pre cautions now in the 2 different trends.
In a downward trend or basing period, just be extra cautious. Who would have thought that mid 1998 techs would be in the hole so much. Think back to 1995 and 1996 on this thread. 1998 looked like the latest point for all these companies to start soaring.
I could go on, but thanks. The knowledge we all share here is helping to develop a better strategy and the reassurance is wonderful in knowing we are not alone. |
