To: dave b who wrote (20609 ) 5/29/1999 4:05:00 PM From: james ball Read Replies (1) | Respond to
Man Dave, that was really a multilateral question. I got tired reading it, Just kidding. Momentum for lack of a better word is two short term 1 day vs 5 day, wk, mo etc. They are exponentially weighted and serve only as a short term indicator of direciton. The numbers associated with it are the degree or such that the short term moving average is below or above the long term and serves as no guide to you other than seeing a negative become less negative or a positive number becomming more positive is all it will do. Weekly is the most useful and a stock generally holds a certain momentum for average 7 weeks. What I really like to see is when a monthly has been negative for, lets say 12 months then turns positive, this has long term implications for the underlying. I, however find it ancillary to all other indicators we use. I often do not even look at as the P&F is the last word for me. On making a numerical number to go with is possible but not practical. Many services produce numbers that are meaningless. Your brain is an integral part of the equation and without clear though on your part nothing will work. This is why people who become good at the P&F method are few and far between relative to the total number of people investing. It is growing however and this makes me very happy. By turning the process into a number suggests this is a science and it is not, it is an art. The idea is first for you to learn enough to think clearly about the process. This puts you up in the top 1% of investors. Next once you have that foundation, you are ready to use the tools we have available to you. One person might take these tools and make a beautiful Cathederal, and another person right next to him with the same tools will make a Gas Station. A beautiful one no doubt but still a Gas Station. Consistence of the application of the principles is paramount to success. All it takes is one stock you fall in love with and you have ruined one years worth of hard work. This is why we constantly teach in "From the Analyst" as well as provide ideas and guidance to help keep our clients on track. Without the foundation of understanding how things really work on Wall Street, the news reports like "The Street", "Market Watch" will do no good. With the foundation you can find ideas anywhere which is why we created the internet resource page so you can drag us with you as you search the many, many free sites available to all invstors. What makes you different from the rest is you are able to read this rehash of news already available free, and determine if it is garbage or a solid idea. I have seen some of the greatest ideas come from individual investors on SI but I always have my chart to know if they are probably wrong or right. Without the roadmap you are flying blind on a wing and a prayer. Great questions. Did you sign up for the stock contest. We will be having short sale contests and all sort of things that will be fun and educational as well as profitable to the winners. Tom Dorsey
