Water! Water! Everywhere and Not a Drop To Drink! Message Board

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Strategies & Market Trends : Water! Water! Everywhere and Not a Drop To Drink!

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To: big guy who wrote (67)	5/27/1999 11:59:00 PM
From: Wade	Read Replies (2) of 336

Big Guy, I have one of the rules to buy and sell stocks which is based on whether the original motive is long or short term when my first position is established. For example, if my first entry point of WLK is 3 3/4 at 5/12/99, and my goal is $10 in 24 months. I will write it down and check my records very often to remind myself. Therefore, I will try to avoid trading the blimps for many months unless I see significant changes of its fundamentals. I will try to do this in my regular account. I want to capture large gains and pay no tax or only long term cap. gain tax. Another account is my IRA which is exclusively for short term trading. I can own a stock even if I already have it in my regular account. The advantage is no tax and wash-sell rules(?) in IRA account. This approach gives me great flexibility to control my strategy of buys and sells for short term profit. I do not buy a stock for long term investment but sell for short term reasons, nor do I buy a stock for short term reasons but keep it for long term investment. I have learned many mistakes from switching back and forth between long and short term strategies. That was no one's fault but mine. I do not think you made any mistake of holding back WLK if your original goal of buying it was for the long term. A friend of mine only buy stocks but never sells them. All of the dividends went back to buy the same stock. Every one of them is for long term. He picks stocks very carefully before buying them. Once he buys that is it. Of course some of these stocks went to zero or no where. But, he is making huge paper gains this year (1/2 million) after his 30 years investment based on his postmaster's salary. He is 72 and retired. He told me that he made more money from stocks than he made in all his life due to his long term strategy. That was true. He made so much money he does not know how to do with it. I asked him to adopt me<LOL>. I know he told me the truth because of I know every stock he bought and the prices in the last 5 years. The facts made me really humble. You know, I did not believe his buy and hold-forever method can make more money than my trading style about 5 years ago when I and a few TA friends first met him in a local investment club. But, I am a believer right now. Because none of us except him is making huge profit, ironically, all of us have a doc title except him. That tells me a lot. My struggle is still to learn how to pick a long term winner. I ask myself "how did he know most of his stocks were long term winners many years ago?", "How did he spot this winner but I didn't?", and, "How did he learn the patience when a stock went down for years before it came back?" I am still searching for the answers. Sincerely, Wade

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