Paul, I enjoyed reading of your experiences. It is amazing to me how one can know what to do to make money, and yet not do it. For instance, don't hold a losing position. In other words, protect your capital. And yet somehow, one day, especially if you were doing well recently, one is likely to fall into the trap of holding, and holding, etc.
Warren Buffet likened buying stocks to a baseball batter who does not have to swing at a pitch and can take as many pitches as he wants without getting a strike for not swinging. Are we like impatient batters when we swing when the pitch is not perfect? In fact, if we wait long enough for a pitch, we can wait until the outfield is asleep and then swing !
I have made a wonderful comeback from my recent lows. I am now at about break-even. I have been doing well with CD, KELL, and CUBE. In fact, it seems that almost everything I have been buying is going up a nice amount recently.
If I did not risk so much for so long on CD while it was dropping, I believe I would still be way up.
I do hold positions overnight, unlike many traders. However, if the stock is dropping, I will sell. One thing that I have learned is watch out for the July-October period of the year. Often, especially if stocks got off to a good start, the market has a big correction sometime in this period. In fact, I have been up 100% + for each of the last two years before getting caught in the downturn.
I once heard it said by a trader that he knows a bear market is starting when most of his recent picks are down. I have found that to be an accurate indicator. In the future, I plan to take a vacation from trading when I find my usual excellent stock selecting ability seems to have gone south. Usually, a sharp correction follows (though, perhaps limited to the small-caps, etc.).
I have also learned that I can make a lot of money on some of the large caps without taking as much overnight risk as I would on a small-cap. HOWEVER, I have also learned that in the same way that the large-caps can increase upwards, they can fall in the same manner of a small-cap, though this is not as common.
Not long ago, for instance, you could have bought CD @ $ 6.50 and DELL @ $ 40.00. Within days, both of these stocks were up 50%+. Since these are large-caps, you could have had the benefit of the rise, without the liklihood of getting a stock that will go to zero.
Anyway, I hope these experiences help some.
Right now I am holding CD, SKYC, CUBE, FGII, KELL, and BA. I am up on all except BA which I expect to inch up if the market holds.
VALUESPEC |
