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

To: hueyone who wrote (39375)	2/16/2001 12:01:56 PM
From: StockHawk	Read Replies (1) \| Respond to of 54805

>>One way is to add some valuation criteria, similar to Pirah Niman's, Malcolm Bersohn's or other valuation criteria you prefer, and then hold off purchases until your Gorilla meets the valuation criteria in your model. A second way to improve the basic model, as Tom Chwojko-Frank pointed out, is to dollar cost average in to your Gorilla over an extended period of time---thus removing the market risk of buying at a near-term top. Theoretically, employing either of these "enhanced" models should increase your returns over time when compared to the basic "buy a gorilla at any time" model. (IMHO) << Huey, those are good ideas. And I agree with them. However, putting them into practice will be surprisingly difficult. For example, lets say that I determined after much reading and study that in early May, 1999 QCOM was a gorilla or near gorilla or just a darn good investment. At the time the stock was trading in the $25 to $30 range, and a look back would have revealed that over the prior year and a half or so it could have been had for $8. It did not get to double digits until March, and so now it was three or four times higher, and looked expensive. So, following the above I could have waited, and I would perhaps still be waiting, if I did no jump off a cliff when the stock cleared $50 in October or $100 in December. Now, if I had used dollar averaging (which is a great strategy) I might have made my first monthly purchase in May at $25. June's buy would have been around $30, up to $35 in July, perhaps $40 in August, $45 in September, $55 in October, $95 in November and $115 in December. And considering I could have just purchase the entire position back in May, I would be feeling like a complete Idiot by December, having seen each monthly buy get me fewer and fewer shares. I would likely then be reading posts about "he who hesitates is lost" and seeing people who had quadrupled their positions since May. I would be reading rosy projections about the future and, well you get the picture. Lessons "learned" in the stock market are much more difficult to apply then they seem. Buying quick, Russian-Army, buying dips, buying options all sound great and logical, and get "proved" as markets go up, (as markets did pretty regularly in 1995-1999). Now it is easy to see the logic and wisdom in waiting strategies, value strategies, etc. I was often cautious with buys in 1999, thinking a number of the stocks we follow were over-valued, but day after day, week after week, month after month, that caution seemed silly, imprudent, and detrimental to my financial health. Again, I do not disagree with the strategies you mention, I'm just saying that in practice, they are difficult to follow, and do not ensure nirvana or success, or even peace of mind. StockHawk