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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Frank Ellis Morris who wrote (30709)	10/18/1999 2:57:00 PM
From: taxman	Respond to of 74651

"better than putting up with all the risk and manipulations during the interim??" how does your proposal reduce risk? regards

To: Frank Ellis Morris who wrote (30709)	10/18/1999 7:53:00 PM
From: PMS Witch	Read Replies (1) \| Respond to of 74651

Interesting question: October to February. I've heard some market-wise people claim that buying in October and selling in April will enable the investor to skim the best part of a stock's appreciation while sitting on cash when the stock hits an air-pocket. I don't have the figures for the entire market, but I have tracked Microsoft, so I'll use the data I have available. For Microsoft, last Friday of the month close, adjusted for splits: February October Profit (Oct to Feb) 90 1.375 1.750 91 2.8331 3.7284 1.083 92 5.156 5.5469 1.4276 93 4.9844 5.0078 -0.5625 94 5.0625 7.7656 0.0055 95 7.6563 12.500 -0.11 96 12.9375 17.0547 0.4375 97 24.375 32.500 7.3203 98 42.375 52.9375 9.875 99 75.0625 ??? 22.125 As you can see, holding October to February, you'd enjoy 41.60 profit, where the buy-and-hold guy made 73.3125 with less commissions and tax. Please note that the trader's capital was at work (risk) for four months per year (Nov,Dec,Jan,Feb) for $41, while the buy-and-hold's capital was deployed for twelve months for $73. On a return-per- month basis, the trader looks ahead. Further, note that trading from 93 to 96 would have been very, very, discouraging. The trader would most likely move to greener pastures and would've not participated in the steep advances of Microsoft since then. This was also a lean time for the buy-and-hold guy too. Sorry I couldn't help much. Take your pick! Cheers, PW.

To: Frank Ellis Morris who wrote (30709)	10/18/1999 11:19:00 PM
From: Brian Malloy	Respond to of 74651

I'll try and find a more definitive post later. I have posted it around before but basically, One would sell all stocks right around the time taxes are due in April. Then you buy stocks in October. The caveat is that this works if you are buying Indexes like the S&P. If you have a portfolio of rather nodiversified stocks then it would probably pay to understand the cycles associated with the given sector. IMHO

To: Frank Ellis Morris who wrote (30709)	10/19/1999 3:04:00 PM
From: Bux	Read Replies (2) \| Respond to of 74651

Sell in Feb. and buy end of Oct? Hmmm. I would have missed Qualcomms move from around $36 to $200 this year. I think I will stick to holding. Bux

To: Frank Ellis Morris who wrote (30709)	10/20/1999 10:25:00 PM
From: Brian Malloy	Read Replies (1) \| Respond to of 74651

Frank, 1. On buy and hold vs market timing vs best sector. this is an analysis I saw for 1987-1997 a. Buy and hold simply buy a basket of stocks and hold b. The perfect timer. On the first of the month buys options on the S&P if he can close out the last trading day of the month at a profit greater than what he would earn in a money market fund. If he/she cannot do better than a money market fund that month the patient just gets the money market return. Thus the investor has perfect timing moving in and out of the market twelve times a year c. Best Sector. This person simply buys the best performing sector on the first trading day of the year and sells it on the last trading day of the year. Alternative a,b,c each start with $10,000 in 1987. The profits in 1997: a. 11,000 b. 73,000 c. 115,000 Of course many holes can be shot in this. clearly someone with buy and hold in MSFT or INTC would have done a lot better and all types of other things can be said. However, it does demonstrate that there can be a role for expanding ones options. Money is rolling into the Oils and Transports and Manufacturing and others right now. Yes, continue to hold the techs and invest but don't overlook opportunity in other sectors that can spice up your returns at least in the short run. Message 8976004 2. Next: The data used below runs from 1950 to 1997. If you factor in the huge run we made from Nov98 to April 99 and what has happened since then you know that on average things are roughly heading west and the disparity has once again increased. The Dow gained 7,257 Nov through April but only 1,592 in May through October in the 48 year period from 1950 to 1977. If one looks at the S&P if two investor invested 10,000 but one did it Nov-Apr and the other picked May-Oct and during the other part of the year went into a savings or money market fund then the return? Drum Roll please! Nov-Apr=$278,272 May-Oct=$11,390 As always we are talking about "The Market" or large chunks of the market here, not sectors or individual stocks. Buy the 2000 Stock Trader's Almanac, a new one comes out each year. It is a well spent $30. A true value in my humble opinion. Regards PS. some say lies, damn lies and statistics but when we know the numbers, when we move the probabilities in our direction then greater profits can follow and losses can be cut.