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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: AltLar who wrote (4525)	12/5/1997 12:09:00 PM
From: Thean	Respond to of 95453

Larry, I wanted to say a few things about managing your portfolio but you'd better go to the library and read up on some books. Now to the general question about buy and hold. Speaking from someone who had tried this method in the early year and now no longer practising it, I would offer the following for a sector such as the drillers who are on a long term uptrend. Buy and hold is OK. But if you want to beat the group, you would have to trade more often. It is however NOT OK to buy and hold a company or sector that have short boom/bust cycle like most of the technology stocks. So how do one decide to bail if things began to shift to the negative side in a long uptrend, there are several ways. My way is to use TA as guidance but try to get a feel of the sentiment as well. Sentiment moves stock short term, fundamentals make sure they go that direction in the long haul. I would encourage you to study some drillers chart back at least 1 year and see how one can use chart to identify early warning signs for a big downturn. We have two this year, one in January and one starting last month. To put it simply, if the trendline breaks, get out or reduce position because everything being equal the odd of continued upward climb is only 1/3! I never short the drillers so in this situation I go to cash and wait. When a trend is broken, it can bounce back up (1/3), head down (1/3) or go sideway (1/3). In the peaks and valleys of the one year chart, you should be able to identify the probabiliy of up/down/neutral over the course of the year. Give it a try and it's not that hard. "So how do you decide when to sell a declining long term holding?" Sell it early on and sit on cash if undecisive. Cash is always king in uncertain time.