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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Spots who wrote (12907)	1/9/1998 6:03:00 PM
From: James F. Hopkins	Read Replies (1) \| Respond to of 94695

Spots; Price Weighting..is if you take the Index total, and divide the price of each issue at the time into that total index..you allocate that number of shares to that issue. In effect PRICE weighting says you have exactly the same amount of "dollors" in each issue, regardless of the price of that issue. You invest just as much $ in UK as you do in GE..that's price weighting..( I don't recomend it ) but I also would not recomend bying the same amount of shares of each stock regardless of the price ( that's really not weighting at all ). Still it's market cap weighting that tells the most at a glance as it represents both price & shares out standing, and reflets more of what the majority of the public is really doing. With this it's kinda inverted ( you own more shares of the MEGA caps than you do the thinly traded ones, regardless of price. and belive me it's the Mega caps that trade on an average much more volume than the Med caps...even here there is plenty of room for error..but it's a huge improvement over just wathing the DOW bug and taking that as an indicator of what the market is doing. Doing that is next to being brain dead. ------------------------- I need to improve my indexes..but it takes time. I need to be able to get the data on all of them at one time in spreed sheet format, and feed into excell.. Then the spead sheet needs to total the losers, and winners into seperate groups..with their actual volume x price change. hmmm..I could do that with out seperating them. just do volume x price change in and out side colum, then total the results..the result would show clearly if money went in or out and how much. ------------------------- This gets around days when market says more lossers than winners, or the other way around, but fails to say that the MORE was really less in Dollors..or the Less was more.. We need to see the actual money flow..and compare it percetage wise to the index change, while knowing if the flow in is up several days but the index down, because of an anomally in some lesser traded issues, well then we have a leading indictor..making it into a leading indicator by noticing the divergance between it and what is "actully" happening..is the thing that can give you an edge, and let you get in front of the curve..or at least close to the real curve, of the market, which at best the DOW is trailing from one or two days, to several weeks. ---------------------------------- I'm not just into saying the DOW is missleading, I'm saying it can be used ( but not on it's lonesome ). And I bet some people are onto this and not talking about it either. --------------- I want to create a leading indicator, using the DOW as it is, but aginst itself, by finding or catching sizeable anomolies, before the index catches up with herself, this for the sake of market timing. Which some will argue can't be done..but I'v come real close and I'm getting better at it, so I'm not going to pay thoes brain deads any mind. Market timing That's what this is all about, how and when to jump in a "basket"..or index and exit vs all the fuss of picking individul stocks, how and when to buy and sell the S&P in such a way as to beat it. Something 85% or more of the mutual fund managers can't do. And most individual stock pickers generally do worse than the funds..they may say they don't but I got data from two brokerage firms that shows it. Funds have an edge, only hot shot day traders ( and they better be good on paper before they start, & many get into that and go broke ) Most can learn to trade on paper good, but often lose when they go to real money. Market Timing that's the name of the game. Jim --------------- Ps Also This is handy for going in and out of No Load mutuall funds "they don't like it" but the way I go in and out they don't know I'm timming them, as I go in with a basket of others via my broker.. I also track over 35 No loads..divided into sectors and market cap. I'm a little new at it but I'v road OAKSX up twice and missed most of it's down side. ( it's closed to new investors so I always maintain at least one share ) by market timing just getting half way close you can beat the funds by using them. ------------------------- And I'v filtered through enough hype on SI in the last two years to know 85% of the hot individual stock pickers have not done so hot. I go back and find old ( you gota buy this posts ) and then look at the results. I also look at all the "what happened to so and so "..crap with the earnings reports and sudden bad news that dumps a stock..I got paper portfolios running up my ying yang..and some of them have really convinced me the average joe cannot afford to buy a spread of stocks wide enough to protect himself aginst a big dumper. And one big dumper in ten can not only kill the portfolio it can take a lot of time to make up. I'm in one stock right now, and when I get lose of it, it will be baskets from here out..with maybe a short or two..but only if I'm covered with a call. Not a stop loss. Baskets can be had many ways, NO Loads..WEBs, and the indexes, can each give you a basket, "SPY" is an example..trade it and trade it well and you will beat the S&P "if you can just market time." and with them your risk is greatly reduced.