Another one ,, as dogs bark
Jan10,1999 21:45 EST
Joe,
Noticed most of what you've been posting from members, are basically day
traders sending you their stories. However, my guess is that there are
a fair number of 'paper traders' such as myself following you. Thought
I'd throw in my 2 cents worth of how I've coped.
Last year, I took some rather big bets on a couple of technology stocks
I knew a lot about. Sadly, the market didn't know as much as I did
about those stocks, and they plummeted (I guess sometimes too much
knowledge may not be a good thing!)when the market crashed. I was
rather heavily leveraged in those stocks, and lost heavily when I had to
liquidate. Basically, I hadn't learnt to bail out and take my losses -
I was the eternal optimist, expecting those stocks to turn around. I
took my losses, and rethought my strategy. Bought some rather decent
stocks at the bottom - Citigroup, Alcatel, Disney, Microsoft, Netscape,
etc. - basically built a diversified portfolio. And decided to play
with the rest. Then I saw your writeup in the Journal. I had
corresponded with you on occassion on SI, and have to confess, I thought
you were nuts - crazy! :) I think it's your overuse of ,,,,,, got to
me.
I decided to sign up for a month, thinking I was going to make a packet
on your tips overnight. I didn't understand exactly the logistics of
the pump-and-dump process (I understood the theory, but not the
technology required) and made a little on a few trades, and lost heavily
on others. I was pissed (not at you, but more at myself for being
rash), but realized very quickly that I really needed access to a Level
II screen. Since I'm not a day trader, and am employed at a
corporation, I don't have the time to work with a Level II screen.
Also, I noticed, that your not-day trade recommendations were doing me a
decent amount of good. Sometimes I watched the stock too many times a
day, expecting it to go up every second, and when I didn't got up about
a day or 2, I paniced and bailed - for a small profit, only to see it go
up a LOT a few days later. I wasn't patient enough.
I know i'm not going to make as much as some of the day-traders have
been making. However, importantly, I have learnt to shoot for lower
returns over short periods of time. Before joining SA, I was contended
to wait 12 months for a stock to go up 50% or double - buying it at the
bottom and waiting for a turn around. But now, I'm learning to buy it
when it's about to trend up and take a 10-20% return - basically on your
advice since SA members are doing the DD here. If I can do that in a
disciplined manner every month, I'm shooting for 120-200% return over 12
months, instead of 100% return. Heck! I'm happy with that! Earlier I
was heavily into technology stocks since I know that sector DAMN well.
But now, i'm getting a little better diversified with the stocks that
are being brought up at SA. Here's is what I have to tell the non-day
trader members of SA:
1. DON'T get in on the pump-and-dumps. Stick to paper trades.
2. Buy on the low - and sell according to Joe's guidelines
3. Joe tends to make a ton of suggestions about what to buy - however,
if you're like me, with a finite amount of buying power, then it
important to buy at the lowest price - put in a low price and WAIT. If
you hit the price, that's good. If you don't - SO WHAT! The most
important thing to remember is that at any given moment, there's always
something to buy. Put in a dozen buys - you're only shooting for 1-2 of
them. And you'll almost always get 1-2 of those dozen or so orders
filled.
4. MOST IMPORTANT LESSON FROM JOE - don't chase! Good things come to
those who wait.
Since October, when I almost got wiped out, my portfolio has gone from
$40K to $202K - that's much better than the market, and I'm confident
that if the market tanks, I'll be OK coz. I know how to get out. I
started off with 40K and as long as I bail out OK, I'll remain above
that amount.
Hope this helps. |
