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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Tom Trader who wrote (22996)	4/18/2000 9:53:00 AM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Tom, As I mentioned yesterday, I am coming to the conclusion that it is better to stick come hell or high water to a reasonably sound system than to constantly switch back and forth or to continually make changes under the guise of tweaking or improving a system. To the extent that we try to make such changes I'm convinced that most people become more inconsistent in their implementation of their system. So everything I have to say in response to your post is in the context of the importance of being consistent, whatever we do. For example, if a gorilla became over-valued by 100% or 200% or whatever percentage that you would choose to use, is there a point when you would make the judgement that it is not worth owning at the inflated price? It's just my system which won't be good for everyone, but the only time will sell is if the combination of three factors happen at the same time -- when the position represents close to 60% or more of my portfolio, when it got that way primarily because of momentum players, and when it has fallen at least 10% and is at the risk of the momentum players leaving the stock. Other than that situation, I won't sell a Gorilla no matter how overvalued I think it is. That's because I have no way of knowing what press release will come out the very next day changing the fundamentals of the stock for the better, causing the valuation picture to change dramatically. There are a lot of ways to make money. This is just my way. For the record, I think most people would be better off applying the same disciplines to their tax-deferred accounts as they use with their taxable accounts. The problem most people have (not all) is that we understandably don't have the discipline to stay the course. It becomes even more difficult to stay the course when we're trying to be consistent under two sets of rules at the same time because of different tax ramifications. Just my way of looking at things. --Mike Buckley