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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (13924)	2/13/2002 4:54:19 PM
From: jeffbas	Read Replies (1) \| Respond to of 78634

Paul, I am in your boat. I have a lot of trouble paying up for a stock with momentum. My simple reason is that there is always another idea, where I don't have to take that added risk. There is another way to play such stocks though, by selling in the money puts, with good time value. You can often cut 10% off the price by doing that, with a strike price that you would be happy to see exceeded.

To: Paul Senior who wrote (13924)	2/14/2002 6:09:13 PM
From: Dale Baker	Read Replies (1) \| Respond to of 78634

And then there are the Dale Baker types who purposefully monitor those upward prices and use them as a signal to get in. Sometimes that works (food stocks, home mortgage co's, recently). FWIW, I use price breakouts as a shopping list, then apply value criteria before I buy. Often I see stocks on the new high list day after day but I can't jump in because I don't like paying 5x sales or 4x book or a PE over 50 or whatever. My consternation comes when those "overvalued" stocks keep going up. ;<) The risk is buying breakouts in a stock before it corrects. But the payoffs tend to pay pretty well.