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Strategies & Market Trends : Ask DrBob -- Ignore unavailable to you. Want to Upgrade?

To: bcrafty who wrote (92342)	1/2/2006 9:33:34 PM
From: Jeff O'Brien	Read Replies (2) \| Respond to of 100058

bcrafty, Thanks for the follow up to that Fortune story. You make a lot of good points. If you don't mind, how do you then buy your stock after a choice has been made? For instance: How much will one stock ever be as a percentage of you total portfolio? Do you do a full buy immediately, or buy in as it climbs? Do you do full exits, or sell in parts? Do you daytrade, swingtrade, buy long term or some combo of those? Just curious for another perspective. Thanks! Jeff

To: bcrafty who wrote (92342)	1/2/2006 9:50:19 PM
From: FLACK	Read Replies (2) \| Respond to of 100058

bcrafty - As always, I enjoy your posts! And this is a good observation... "My biggest problem with anybody's pick, whether it's based on TA, FA, or a combination, is that almost nobody lists an exit strategy, no matter how vaguely or loosely one is making it. For me, an exit strategy is as important as an entry, and it's one that the stock pickers should make note of as well. If the picker is implying that he know when to hold 'em he should complete the idea by giving us a thought of how he knows when to fold 'em." I agree. And I admit that I'm guilty of not citing exit strategies. My rationale is simple - I don't know in advance when I'm going to pull the plug. I could say that I'll be exiting if the price breaks through support (or resistance). But, in fact, I may or may not. And that's because the market is dynamic. Gee, that sounds like something we'd hear in a college econ course, but what I mean is that, for me, it matters a great deal how the price arrives at support (or resistance). Listing a cross of moving averages or any of a number of indicators might justify an exit. But again, these may or may not cause me to exit. Example: if the pullback is on very light volume, that is, it looks as though the buyers just need to rest and regroup, I wouldn't exit a winning position - all other things being equal. Rather than stating a specific exit, that may in all likelihood change, perhaps I could say that I'd like to exit with X percentage of profit... or begin scaling out at the first pullback from resistance... or if seasonality looks like it's kicking in... or when the price has stalled for X number of days/weeks/... or when the dog barks... I'll have to think about this some more. And how's the legal biz these days?