Berney; RE:" stock picking "
Given 30 stocks to watch, I'm working with the following allocations:
10/30 = 33.4% TECH
6/30 = 20% DRUGZ: 4/30 = 13.34% DRG.X; 2/30 = 6.67% BTK.X
6/30 = 20% RETAIL
6/30 = 20% GlobalTELs, essentially "investing in the EU"
2/30 = 6.67% FINANCIALS
...looking at my charts, for the last three years, the highest gain sector is TECH; the highest gain (with the lowest risk) sector is DRUGZ; RETAIL has been hot, but only for the last two years or so; the same could be said of most EU stocks; FINANCIALS had the highest risk, (indeed, higher than TECH) as a sector. All of these stocks/sectors had outstanding kapital gains - so it's a skewed set, FWIW.
"risk" in this case was roughly measured by back-testing essentially random purchases (once a month @ OPEN) over the last three years versus (the same dollar amount per year) buying when the sector's weekly chart stochastics (%K = 11 weeks, 2 slowing, %D = 3, method Time Series) indicated a "buying opportunity". The more that "buying on dips" bettered a purely random strategy, the higher was the perceived risk for that stock/sector. As I said, this was just a rough way to look at them (^_^)
"random" buying (once a month @ open) of LEAPS on DRUGZ is a pretty good risk/reward tactic to beat, dudes...
...looking at a quarterly chart for DRG.X since 1995, there is no "decay" (ie., no red quarterly candlesticks) what so ever. Buying DRUGZ or, LEAPS on DRUGZ (or, some sector fund thereof) once a quarter @ OPEN appears to be a pretty good, albeit simplistic investment strategy that's worked well over the last few years, too. Novice investors could do a lot worse (and no better with SPY, which as we know, beats 80% of the fundz to begin with).
-Steve |
