Proper "Reward to Risk" and capital preservation are the lessons I hope we have all learned in the last year or two.
OVERRIDING PHILOSOPHY- I am more convinced than ever that the best way to be successful is to BUY QUALITY STOCKS AT THE RIGHT ENTRY POINT.
Quality stocks are those that have reasonable PE's, PEG's and Price to Sales and improving fundamentals or momentum. (It should be noted that I normally don't short stocks). Why is this a good approach? Simply because I believe that (more than ever) these are the types of stocks that most of the big money will flow into, as Fund Managers, baby-boomers, and even many daytraders don't want to get scorched again risking precious capital on over-priced momentum stocks that could take a big hit at a moment's notice. In other words, capital preservation is important part of the equation, too.
TYPES OF COMPANIES - Drug and Biotech stocks, Healthcare, Banks, Manufacturing, Consumer, even Oil and Gas companies ought to be considered along with Technology. We rule out no sector and watch for sector rotation and momentum. Of course, we'll look for special situations, even occassionally in low-priced, highly speculative issues. We'll even look for long term plays, but the main thrust of this thread is:
SHORT AND INTERMEDIATE TERM, FAVORABLE REWARD TO RISK STOCKS that are based on chartwork, news, and overall market and sector sentiment. In other words, Trades That Make Sense!
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