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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?


To: Investor2 who wrote (11805)2/8/2000 9:20:00 PM
From: Mr. BSL  Read Replies (1) | Respond to of 15132
 
I'm curious if you have a mental "stop loss" for the bear funds, should the market keep going up.

If the market keeps going up, those indicators that caused one to go defensive in the first place will eventually go positive and the hedge would come off. The net result would be missed opportunity in 50% of the market gains that took place when the hedge was on, assuming that one hedged 50% of his holdings. A 20% market gain would result in a 10% portfolio gain, all else being equal. FWIW, I use the Point & Figure New York Stock Exchange Bullish Percentage indicator as my measure of market risk.

Peace & Profits, Dick