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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: grinder965 who wrote (24643)	7/22/2003 12:22:52 AM
From: chowder	Read Replies (1) \| Respond to of 206184

Grinder, Part of my response to you will come tomorrow when I respond to Finallythere. Let me just say at this time, that I don't include mutual fund managers in my examples. I'm talking about the top traders in the world. These are people who trade the institutional money, not the public's money. I'm talking about the more successful hedge fund managers. Like you, I have bought beaten down stocks but, I waited until the price started rising and some of the moving averages were crossed. I bought PVN at $2 and change about two years ago and still own it. I bought RAD at $2 and change but again, I waited until the technical indicators firmed up. I wasn't a buyer as prices were falling. I recently bought CC at $4 and change after the technicals firmed up. I waited until I saw that prices were trending higher. Buying stocks as prices are falling, and trying to catch a bottom, isn't a strategy that provides a high probability for consistent profits. It's the consistency, not the up and down percentages, that will provide better returns over the long run. Like a fine engine, you can tune it to get a little extra horsepower. A fine strategy can also be tuned to provide better results, based on the condition of the market. If your strategies aren't consistent, neither will your results be. And, if your strategy is to consistently buy stocks with falling prices, I can't imagine one having much success at all. And if one is successful at it, then one doesn't understand risk. You don't risk 80 cents to make 20 cents. You risk 20 cents to make 80 cents. A major brokerage house conducted a study of their retail investors from the middle 80's to the middle 90's. During that time frame, only 8% of them showed a profit. During that same time frame, only about 20% of fund managers could outperform the market. That's a lot of people who don't seem to know how to buy and sell stocks successfully. I have been researching how the 8% of retail investors and 20% of fund managers outperform everyone else. I'll go into a little more detail tomorrow, but for now, let me just say, they don't buy stocks when prices are still falling. They don't try to catch the bottom. And they sure as hell don't average down on losing plays. But, I'll get into that tomorrow. Thanks for your response. I appreciate it. dabum