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Strategies & Market Trends : Charts With An Attitude; Trading In & Out -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (3854)	11/19/1997 11:43:00 PM
From: Dave H	Read Replies (2) \| Respond to of 4701

Sergio, I don't believe I'm taking anything out of context-- on the contrary, I have explicitly defined the context: comparison of POW performance during the period between 10/24/97 - 11/19/97. I was spurred on to do this by Scott's comment that the POWs as a whole seemed to have done well during the correction. I feel that this is just not true. I agree with your comments regarding both the performance of certain POWs from when they were picked, and also the explanations on why some of them have not performed as well recently. However, my purpose in this was a simple one: how did the POW stocks do during the recent correction? The Dow is something that everyone uses as a benchmark for the markets, and since today the Dow closed ABOVE the 10/24/97 level (a VERY significant achievement!) gaining back all losses during the correction, I thought it would be interesting to see how each POW did during this time. Unless a POW was no longer attitudinal on 10/24/97, it was still a POW. I will concede exclusion of the POWs that were picked after 10/24/97, although if you look at their combined performance, they basically even out. I did exclude BLSC, since doug explicitly dropped that one from POW status. But the fact remains that during the period of 10/24/97 - 11/28/97, many POWs performed very poorly. How can you tell? The only way is to compare it to something! I have chosen the standard benchmark, the Dow. That is perfectly reasonable. And in doing so, I've found that many of the POWs performed very poorly. Whatever price you initially bought at, you still lost money during this time period where the market corrected and bounced back fully. Many of the POWs did not do the same. [though some, like RECY and RADAF, trounced the market climbing over 10%!!] You mentioned CADE being picked at a price of 1.75 -- great, you have made lots of money. But if you held it from 10/24/97 until 11/19/97, you would have lost 12% of that money, no matter how you look at it, while during this same period the general market corrected itself and broke even, and lost nothing. Doesn't that make you wonder why such a difference? These are POWs! So, my point is that it doesn't matter when a POW was picked -- I don't care if you bought CADE at 1 -- during the correction you still lost 12% of your money. Just wanted to point out that the POWs do not represent a mutual fund or a recommended portfolio. As such, to pick a date at ramdom for comparison of the POWs to the DOW serves no reasonable purpose and is not an accurate measure of the success or failure of the POWs. Sergio, 10/24/97 is a very significant date, as is 11/19/97. They aren't random. Furthermore, I'm not commenting on the ultimate success/failure of the POWs, I'm just analysing their performance during this signficant time period. I didn't mean to ignite any emotions here, I know you and Doug and Instock have done a tremendous amount of work picking these terrific stocks. But I don't think it's wrong to try to analyse performance of these picks during SIGNIFICANT periods in market history. The POWs are great stocks -- doesn't it make you wonder why they have performed so poorly overall during this specific timeperiod (which is NOT random?) compared to the general market overall? I certainly do! -dave

To: Sergio H who wrote (3854)	11/23/1997 3:36:00 AM
From: Doug R	Read Replies (2) \| Respond to of 4701

Sergio, You make good points as well concerning market vs. POW performance. Maybe each POW should be compared to the market from the time the POW was issued. Or maybe this approach AND Dave's approach can be used to show how basic buy low/sell high rules apply to all stocks. That way people that tend to buy high can adjust accordingly. Doug R PS; One more time I will say that I advised caution just a week or two before the correction. I wrote that I wasn't going to come right out and say the Dow was headed below 7,000 but I thought I got the idea across. I was also asked about the strength of the Dow toward the end of July and stated that there was 2 more months of resiliency. I geuss I'll have to run a complete TA again before Monday. Stay tuned. Doug R