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Strategies & Market Trends : Tech Stock Options

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To: Lyle Abramowitz who wrote (5697)3/2/1997 9:56:00 AM
From: j g cordes   of 58727
 
Lyle, thanks for the article... it dramatically points out the gulf between "investing" and "trading." One wonders how some of these people after a day at the office, can react to normal time events like sitting through a movie wondering if its good or bad, or sitting through a dinner wondering if the salad dressing is a buy or a sell!

I think one useful approach might be to look at a percentage of any stock price as being momentum, another percentage as being trend and a percentage as being invested. The percentage content will give you a different velocity and time horizon for price movement.

If XYZ stock is 30% momentum then bad news can skim off 30% in a very short period of time. A stock like ZITL fits this model. News, from one event could send it up or down significantly.

Some stocks are mostly trend content, like KO, and take a while to turn, even after news would have made momentum heavy stocks fall. But when they do turn... its a steady decline.

Investor stocks are in the forever mode, yet even they, sometimes get attacked by "value" barrons and momentum players. Their best defense is to yield a high dividend and travel with good will and gifts to its investors.

Jim
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