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To: Larry S. who wrote (52307)	10/26/2004 2:10:15 PM
From: Ron McKinnon	Respond to of 53068

Five Kernels From the Stock Trader's Almanac By James Altucher RealMoney.com Contributor 10/26/2004 2:00 PM EDT I just got my Stock Trader's Almanac 2005 in the mail, and I immediately went out to the coffee shop and pored over the new stats in the book. The brainchild of Yale Hirsch, now co-authored with his son Jeff, this book has been coming out annually since 1969 and is a real treat to those fascinated by market history. The statistics and ideas below all come from the book and are just the tip of the iceberg of what's included in it. (Full disclosure: I may be biased in my enthusiasm for the book, not only because I consider the Hirsches friends but also because of their taste in reading -- see below.) From September 1997 to July 2004, the first day of the month produced all of the Dow's gains and then some. If all you had done was hold the Dow on the first day of each month and stayed in cash the rest of the time, you would've participated in 3,559 points of Dow increases. If you had bought and held during that period, you would've participated in a Dow gain of 2,711 points. The idea here is that most inflows into mutual funds and pension funds happen on the first of the month, creating the upside. Buying NYSE stocks that hit 52-week lows in December and holding for two months is a winning strategy. The underlying idea here is that tax selling causes an irrational amount of selling pressure in the final month of the year, setting the stage for a bounceback. The Hirsches demonstrate that from 1974 to 2004 this strategy has a 9.8%-per-year advantage over simply buying and selling the average NYSE stock during that period. The Dow had 10 of the 11 best days (by points) in its entire history during the bear market that ran from March 2000 to December 2002. Similarly, 10 of the 11 best days (by percentage) in the history of the Nasdaq occurred during that time. These stats underline once again how important it is not to be caught on the short side, even in a bear market. Although it has become a cliche, "Sell in May and go away" really does seem to be true. Since 1950, the strategy of buying the Dow on Nov. 1 and selling on May 1 would have turned $10,000 into $492,060. The same strategy, but buying on May 1 and selling on Oct. 31, would have turned $10,000 into $9,682