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

To: Uncle Frank who wrote (33484)	10/21/2000 6:43:39 PM
From: rudyprins	Read Replies (2) \| Respond to of 54805

UF: Thanks for your response. I understand and buy into that approach in your example of Aunt Nancy's port, but all her returns as positive. I don't think I communicated my question clearly enough though, so I'll try a different approach. Sorry. I don't think we are talking risk here because if one is taking advantage of dips and accumulating anyway, and expecting previous highs to return, then I thought selling off the more costly shares when their respective prices at purchase are regained, with the additional qualifier that the cost spread is great enough to make it worth it, one could improve ones cost/share and stock performance significantly, no risk involved. I'll use a specific example of my ELON holdings, in which you can observe + and - returns, as a case in point: 10/21 Price Date of purchase Cost Return 33 1/13/00 30 10% 33 1/24/00 45 -27% 33 3/20/00 88 -62.5% 33 10/6/00 26 27% To keep the analogy simple and use one transaction to illustrate an outcome, assume that I purchased the same number of shares today at $33 that I paid $88 for on 3/20 and the price/share returns to $88. I sell my $88 shares for zero net return at that time (no tax consequences if not in an IRA). In so doing, the value of my ELON holdings would improve by 30% over not having done this. Of course, if the price on 10/21 was $20, the gain would be even better, but you get my point...I hope. :) Do you do this? 'preciate your input. rudy

To: Uncle Frank who wrote (33484)	10/21/2000 9:08:54 PM
From: shuebert	Respond to of 54805

Learning Experiences I have another method for developing an investment style I can have confidence in--- I have been learning a great deal by using pretend portfolios comparing my ability to use different approaches. At this point in time, I am becoming more and more comfortable that LTB&H works for me. In real life, I chose a very inopportune time to sell my mutual funds and start investing in technology stocks. My stocks were all purchased this past Spring, with about one thirdof them bought on March 9th. When the market kept falling and my portfolio lost around half it’s value, I started to doubt my LTB&H strategy that had kept me in the stocks to the very bottom. I felt that maybe the CANSLIM approach of cutting loses at 8% would have saved me a lot of money. At the end of May, I set up pretend portfolios with MoneyCentral’s portfolio site. I chose10 stocks (NTAP, QCOM, SEBL,GMST, SNDK, CTRX, CREE, WIND, PHCM, ITWO) and started 3 identical pretend accounts: my G&K account where I only sell stocks based on significant fundamental changes; my CANSLIM account where I sell any stock that slips 8% below my purchase price and allow myself to buy and sell based on market conditions; and my SIMPLETON account which I set up and haven’t changed at all for comparison purposes. In the beginning the CANSLIM account was off to a big lead. Since it was started at the end of May everything was going up until the Citrix fiasco. I sold my Citrix in the CANSLIM account for an 8% loss the day before it plummeted. I sold my Citrix and bought more NTAP in the G&K account after it plummeted and even LTB&H Mike Buckley turned sour on it’s prospects. I haven’t sold anything else in the G&K account. In my CANSLIM account I have bought and sold numerous G&K type stocks, including Qualcomm three times (I believe in it too much, I just can’t keep from buying it again later after I have been forced to sell it by the CANSLIM rules.) By the end of August the accounts were nearly equal. I decided that the market conditions in June and July might have skewed the results, so I started again at the end of August--- I continue to work with my first accounts but also started another set of comparison group of 10 stocks to see if an experiment such as this would be different if it was begun under different market conditions. At this point in time my first G&K account is well ahead of my first CANSLIM acount. To my surprise, (given the poor market conditions in September and October,) my second G&K account is beating the tar out of my second CANSLIM account. Inspite of alot of drops in the market, selling quickly and taking a small loss has not saved me money-- I lose too much from the churning of the market. I haven’t been near good enough at timing the market. Even when it subjectively feels I am calling things somewhat right and should be saving myself some money getting out before a major drop-- I look at the figures tallied for me by MoneyCentral and my trading is just not making it. Sometimes I jump back in too soon-- sometimes not soon enough. I am also finding I am burdened by having to watch the stocks closely and paying too much attention to the market using the CANSLIM approach. I won’t use a trading approach in real life unless I become convinced that I can do much better with it than LTB&H. At this point, I don’t see how that is going to happen. Through these months of learning about T.A. and following “guru’s” on market timing(like trenchrat and specialist on the MetaMarkets site) I do not see my trading ability getting better--- I see LTB&H pulling further and further ahead. I am very, very pleased to be gaining confidence that LTB&H is the approach for me, even in a correction such as we have had in October. At this point I am not even figuring taxes into the equation--- if the results remain even close to equal I will stay with LTB&H. I have also started some other pretend accounts to play pretend gorilla games-- a B2B game, an optical networking game, and a game using all the stocks Paul Johnson recommended in his Mindshare interview. Using Money Central makes it very, very easy to set up and follow numerous portfolios. I hope to eventually decide whether I am better off doing TRFM style basket gorilla gaming or doing G&K type investing more like the G&K portfolio. What I have learned: Market timing is not my strength and trading does not appear to be a good idea for me. I am very glad I decided to buy and hold instead of selling my stocks. When I bought many of my stocks in real life the NAZ was over 5000. Now, with the NAZ around 3400, my real portfolio is back even due to the performance of my G&K stocks such as NTAP, ITWO, and SEBL (even with my QCOM still being half of what I paid for it in early April). I think Mike Buckley’s previous comments were prophetic when he said a bear market would be where G&K stocks would really show their stuff in comparison to other stocks. Inspite of having made little money in the last 8 months, I have learned a lot, I feel very optimistic right now and very much appreciate this thread. Susan