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Strategies & Market Trends : TA-Quotes Plus -- Ignore unavailable to you. Want to Upgrade?

To: Richard Estes who wrote (8968)	3/13/1999 8:08:00 PM
From: Nine_USA	Respond to of 11149

Richard, <<Stock splits should only effect a price level study.>> In addition to price, splits affect either volume, or dollars traded for a given day. I forget how Gary treats volume prior to a given 2-1 split (for example), but if he retains the original volume, then the dollars traded is half what it actually was. If he doubles the volume to keep the dollars traded to what actually occured, then the volume level and volume moving averages are distorted. These are all variables of interest. I avoid these problems, at least for those splits occuring after I create my mini datafile. regarding volume OR dollar traded variables occuring before a split -- one must be incorrect in Gary's database. Also splits affect total shares outstanding and total shares short. Some investors pay some attention to these variables. And, splits affect liquidity which is a consideration to some funds and large investors. I agree with your other points, but they seem to be related to trading advantages. I am looking for 3 to 6 month holding periods as commission and in and out spread costs are too severe a handicap to give away just for the action pleasure, which I confess I too crave. But spreads & commission can't be much less than 1% per round trip and if I trade my capital once a month, I need to do (1.01 to the 12th ) - 1, just to break even. This is 12.68%. Whereas the cost of trading every 6 months is 2.01%. The question of exit points is still up in the air for me. I have found 12 month holding periods to be about as good as two 6 month investments with sale and re-investment based on revaluation of the Qp2 universe after the initial 6 months. <<I am not questioning your system for you. But everything I have seen says the moves up come from the low side of price. I would think that the 10 to 30 might be a good price range>> Given all my criteria, relatively low priced stocks rarely emerge as selected for me. I am not unhappy about this as I think there is more management chicanery associated with cheaper stocks, the media/analyst light shines brighter on the big cap/big volume stocks, and certainly more risk for smaller, lower priced stocks than the industry leader. Last and not least I like being able to sell MSFT or EMC or AMGN at the market and maybe incur an 1/8 or so in spread cost on an $80 to $150 stock. I need to have more data and do more work. Shorter holding periods have the allure of fresh rankings, but the higher transaction cost. Also, assuming there IS some merit in my approach, it takes some holding time for the stocks to separate on performance. On any given day, MSFT is about 50-50 to go up or down. But on 12 months, it is probably 80-90 percent to be higher.