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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (39872)	9/13/2000 8:06:23 PM
From: bambs	Respond to of 77400

at least 9 out of 10 daytraders lose money. the ones that can make it do very well. it's a very tough game. I expect even more to lose money and quit in the near future as some old swing trading styles don't work well in this changing market. One thing is for sure...you need to play both sides of the market if you are going to daytrade.

To: RetiredNow who wrote (39872)	9/14/2000 2:11:56 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

mm - I wouldn't take the bet (you're right). In fact, there is a body of theory to state that the average return for all day-traders should trend slightly negative over the long run. I don't go that way myself either. But that's tangential to the point, so I'll be a little more clear. I'm not talking about a hypothetical strategy executed constantly over 5 years. I'm talking specifics, recently, during the period where the underlying theme of the strategy has been punishingly abused on this thread: CSCO a better short than a long at $70. And more specificly, this being held up against a 1500% return over 5 years. My point is that there is some evidence to support that it is, indeed (however temporarily) presenting a better rate of return and so should not be dismissed so handily. Let me be even more clear. Let's look at the chart for the last six months. April, May, June, July, August and now September. In each of these months CSCO tested $70. In each of these months - sometimes twice - CSCO failed the test and dipped. Let's say our hypothetical strategist has the courage of their convictions - enough to post them on this thread and endure the taunting <g> - beleives that CSCO is a better short than a long at $70. Let's say they act accordingly and take a short position whenever it hits $69 and sell on a drop of more than $5.00. In no month does our strategist lose money. In all months our strategist is presented with opportunity greater than $6.00, and in half of them greater than $10.00. Using only $6 as a monthly figure, that makes 8.7% per month for six months.. and today they have taken a compounded return of 65% over 6 months, or equivalent to 2015% over 5 years. This is not to say that this strategy is sustainable over 5 years, or even that it could have been successfully executed without the benefit of the retrospectroscope - just that if executed, it would have been a BETTER strategy from a rate of returns perspective than the 1500% over 5 years. Substantially better. Furthermore, our clever hypothetical strategist is much farther ahead than the poor slobs who initiated long positions AT ANY TIME during 2000. Indeed, some wet finger math indicates that our strategist could now take 2/3 of their portfolio and initiate a long position today superior to the vast majority of long positions established this year - and have 1/3 of their capital to play with. Of course, I have the benefit of hind-sight. However, having presented an existence proof of possible results that aren't shabby at all, I suggest that dismissing bambs perspective off hand is tossing the baby out with the bathwater - so to speak. My personal style is biased towards "investment" versus "speculation", so I would not attempt such a risky strategy myself. My posting here because someone who is nothing if not courageous has made a point worth pondering only to have it slashed at. We're not talking about some mental midget making unsubstantiated statements that are patently goofy in hindsight. We're talking someone who posts an articulate (but unpopular) opinion and backs it up with something that looks like data, and whom history has occasionally vindicated. Sure, you can disagree with the data... and be offended at the bias, but the fact stands for itself: CSCO has been a better short than a long at $70. So there's wheat in the chaff. There may be some substance to the data. Spice. Adds flavor. John.