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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: SirRealist who wrote (23697)	5/28/2000 9:06:00 AM
From: donald sew	Read Replies (3) \| Respond to of 42787

SirRealist, Thanks for your comment. It is realistic and reasonable assumption. I would like to take a few moments to discuss some common sense/realistic issues. With the runun during the bull market and especially since last OCT for the NAZ, expectations from the market got to extreme levels. As we are all aware margin borrowing got to its highest levels and we heard of many stories where many were borrowing from credit cards/anywhere so they could invest in the "SURE THING" the stock market. I dont think many would object for me calling that GREED. Back in 1996 when I first started trading, and I really had no experience prior to that, I too fell victim to GREED which almost sent me into bankruptcy. I started trading in the spring of 1996 playing those damn penny stocks and made huge profits in about 2 months, 5-10 baggers, one after another. Then with the SUMMER selloff of 1996 I kept on buying those damn penny stocks since I KNEW for certain that they would rebound immediately. That was GREED and that GREED caused me to lose all of my huge gains and alot more. Does this sound familiar with the current period???? I was devastated, since I did not have a job and lost the majority of my funds. I knew I needed to develop a system which over the years I did, but more importantly I knew I needed to control the "X" factor in successful trading and that is GREED!!!!! I had lost between $250,000-$300,000, and to this day I dont know exactly since I never want to know - just too painful. I had only about $35,000-40,000 left to trade and LIVE on totally, with a ill mother and 2 children ready for college. Basicly, I ended up with only about $15,000-20,000 to trade with, since I had quite a bit of expenses. Eventually my mother had to spend about a year, on and off, in a convelesence home and we know how expensive that is. Im still a long ways from recouping my losses since not because Im not making money but due to high espenses with taking care of my mother. I truly believe that if I did not control the GREED FACTOR, I would now be in the gutter completely. I am not trying to go after the 10 baggers anymore. If I had attempted to try and get back all of my losses fast I believe it would have been gutter time. With this LESS GREEDY, I was able to make ends meet and a little more to chip away at my losses. I am telling my story so others may learn. Some situations may be worse than mine and others not as bad, but for those who have had losses recently please don't let GREED push you to regain your losses all at once. That may put you into the gutter big time. I equate right now with the summer selloff of 96 where I was so sure that my penny stocks would rebound immediately. Right now is the danger period for those who have had strong losses. For those who have had strong losses, are you looking to borrow money now since you are so sure that this is or near THE BOTTOM, and that the market will rebound immediately. After my strong losses, my main concern was to minimize my risks, but I still needed to make significant amounts. So I started hedging my option positions. Yes I left plenty on the table but Im still trading and surviving without having to go back to work. At times I have also been overly bearish during the strong bullish times, and left quite a bit on the table and in a few cases lost a little since I was short when I should have been long. I was simply maintaining my LESS GREEDY approach by not making as much as some did (on paper only). If I did not have that LESS GREEDY approach, I may have held onto my LONG positions longer and also get sucked into this downdraft. I guess our MUTUAL FUND ACCOUNT is a good example of the less GREEDY approach. With only using, on average, 25%-40% of our capital in unhedged positions we are now up 21% since JAN 21,and thats only play mutual funds, while the NAZ, DOW ,SPX are down 23%, 6%, and 5% respectively for the same time frame. Im not saying that we will alway do that much better than the market. Im saying that with a less GREEDY approach, which reduces risk, money can still be made. It will just take longer. In conclusion, all situations are different so there is no single solution for all who have loss in this downdraft. But one thing I feel for certain, is that if the GREED FACTOR is not controlled, especially now since many are certain this is the bottom, things could get much worse. seeya