To: Jenna who wrote (84942 ) 2/26/2000 6:38:00 PM From: Doug Robinson Read Replies (1) | Respond to
Excellent idea on creating a core position. Here is another approach and one that I've used for years, for those interested. I establish core positions when very strong buys signals are initiated at low prices. In eighty percent of the cases these prices ultimately are the lowest for long periods. The strength of the signal and subsequent signals will begin a period of buying and selling the same stock in the future. In the twenty percent of cases when the stock fails to move up materially in the future, I'll exit over fifty percent of the time with profits in the bulk of the shares bought. I'll always keep a core position (was 20% of the original buy but now is 30%) until the price comes back to the original buy price. At that time I'll exit the position with a worse case limited loss. When the original core buy isn't strong enough to send the stock higher, I've found that a new signal will come in the near future. When it comes I'll start another core position, at lower prices. There have been some instances when there has been an upward creep in prices which will result in my establishing a new core position at a higher price since the "creep" wasn't strong enough to create a buy signal that meets my criteria. Interestingly, these types have always resulted in very strong upward trends when they finally do signal.
