Don, EXCELLENT stuff! We have got to be near the bottom. This is turning into a farce from a comedy of errors. Many of us long time posters here are in the same boat as you, if that is any consolation.
I think some in this group will start moving after the August lull and as we move into mid to late Fall. Others will be lagards till mid to late next year.
I've been tempted to buy more here, but I decided to wait till I see a turn in Earnings. I think we still have time to buy till then at even lower prices now. I can't believe I am saying that, but earnings this quarter for the most part were very dismal across the board. I think I have been surprised so many times now by how much quality companies can be trashed, that my optimism is still there but kind of in cloak mode. I think till AMAT and KLAC show positive earnings and make positive comments we are not out of the woods.
The only thing that makes up for owning shares, at such higher costs that we could have owned now at such discounts, is knowing we can buy in anytime once things turn and at least make a little money as it climbs back to break even points along the way.
Another important lesson I have learned is that good strong companies in a high growth categories can drop to unimaginable levels in a relatively short time. I know when I first bought my initial positions in AFLX at 24, my SFLX at 11 or my FSII at 15, I could only wish to have bought them at the prices we see today. But they seemed unimaginable that such fine companies would drop that low again without moving up.
I also kick myself for not using stops. But I think what always ends up keeping me from using them is, that I am afraid I will be stopped out and the stock will rocket up. It has happened to me before with DELL I got out 17 went to the moon, CAMP out at 15 went to orbit but since has crashed, and I sold out of SYSF and it went up 20 to 30 points, but it too has crashed and burned.
I think the key is to use stops when the trend is down and not to use them when the trend is up. I got left in the dust before, but it was when almost any tech stock was booming the trend was definitely up. I used stops and got burned each time when teh trend was up.
Then I decided not to use them, but the overall trend has been down and I should have used them, in the last couple of years a stop would have proved useful in each and every case. The loss i would have taken would pale in comparison to the prices i could get in at with much higher shares.
When the next rally comes within the next year, I am not going to use stops until I see a substantial gain that I want to preserve. To take advantage of the normal 4 to 5 point pull backs after a strong run up, I am just going to trade based on judgement and the stochastic indicator as well as bollinger bands and the moving averages.
I've also learned that charts only seem to work when there is a strong trend. And the only thing effecting a stocks movement is the charts and indicators. Nothing runs straight up, there is always those short pull backs and trading or buying opportunities and that is when the charts kick in. The only thing that seems to work really well and is easy is to understand is the stockastic indicator, it tells you when to sell and when to buy in those times and used in conjunction with a moving average and bollinger bands can really make sense to other wise strange movements in price.
The passed few years have been trying and hopefully this knowledge we are gaining at the expense of any earnings will be more than made up for in the coming rally and subsequent cyclical ups and downs. |
