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TranceAddict Investors Club @ Marketocracy (pg. 94)
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| Kinezi |
| quote: | Originally posted by Kapedano
What are the predictions with Oil? How much is it expected to go down? |
The market is in a deep correction after failing the critical topside level of $147 and as such the downside move was a correct move that has been taking place. The depth of the fall we believe will be limited to $108.47 on the 11th September. This should mark the turning point for the market. We would then expect that the market will see a sharp rally correction to the $126 level and this should provide a consolidation level before the market then presses on for the highs again. The market has placed a spike top which should be removed going forward. The reality is that this market could be in a similar phase to that seen in gold and a protracted period of consolidation could be in place which could last until March 2009. However, this said we expect the upside in this market is not finished and a further and more dramatic upside move has yet to be disclosed. The downside in this market would be extended if the 11th September date is missed then the depth of downside could be taken to $88 before the downside could be seen. The important aspect is that the market has now removed any aspect of terrorist valuation. The market day patterning is very much of a market that is seeing a large short position trading and the topside will see very limited natural selling ability. The topside could be find limited resistance to any strong rally. We remain long term bullish of this market and expect that the market is closing to the end of the setback.
Copy/paste from one company who predicted the ris in USD very accuratly. |
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| mndeg |
JC Penneys Q2 profit down 36 percent
Up 7% |
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| Shakka |
| quote: | Originally posted by mndeg
JC Penneys Q2 profit down 36 percent
Up 7% |
Everybody seems to think oil coming down is a huge bullish signal. Retail and consumer discretionary giving potentially a huge head fake, IMO. Especially considering the stimulus package has run its course. |
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| Krypton |
| quote: | Originally posted by Shakka
Don't you at least use a stop-loss point? |
No stop loss. If NVDA declines past my buy point, I'm averaging down. I sell only if the fundamentals or valuation change for the worse. |
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| Shakka |
| quote: | Originally posted by Krypton
No stop loss. If NVDA declines past my buy point, I'm averaging down. I sell only if the fundamentals or valuation change for the worse. |
Your strategy is your strategy, but that sounds particularly foolish. Don't kid yourself into believing you're smarter than the market. A good better knows when to hold 'em and knows when to fold 'em.
The only problem with "averaging down" is that it is the same thing as adding to a losing position. It is always a tough decision, but most if not all professional investors will at least establish a stop loss trigger as a disciplinary device to keep them from losing their shirts. Nobody makes an investment expecting to lose money. Just my 2c. |
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| mndeg |
| My goal is to never have draw downs :D |
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| Krypton |
| quote: | Originally posted by Shakka
Your strategy is your strategy, but that sounds particularly foolish. Don't kid yourself into believing you're smarter than the market. A good better knows when to hold 'em and knows when to fold 'em.
The only problem with "averaging down" is that it is the same thing as adding to a losing position. It is always a tough decision, but most if not all professional investors will at least establish a stop loss trigger as a disciplinary device to keep them from losing their shirts. Nobody makes an investment expecting to lose money. Just my 2c. |
If I used a stop loss with my investment in EGY @ $4.76, I would have never doubled my money. The stock dropped from $4.76 to $3.70, about a 30% loss. But I bought more. I consider the market to have ADD/ADHD. It is a voting machine short term, while long term, it is a weighing machine. My strategy is based on the market NOT knowing more than me on specific companies. If I find a highly under priced company, obviously the market does not know more than me, otherwise, the company would be efficiently priced. I don't believe the market is efficient at all.
Traders would find stop losses much more useful because they rely on the movements of the market, not the underlying fundamentals of the assets they buy. |
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| Shakka |
a stop loss doesn't mean you can't buy a stock back if you step back and re-evaluate. It simply means you staunch the bleeding because the market isn't going your way at the moment. But again, your strategy is your strategy and you are a long-term buy-and-hold guy. I have plenty of issues with that approach, but there are plenty of gripes with my approach as well. Simply constructive criticism.
What is your cost basis on EGY? When and at what prices did you buy how much? Interestingly, from a long-term buy-and-hold standpoint, if you bought it back in 2004 at ~$4 and sat on it, your total return to date would be ~65%. Definitely not bad at all at 16%/year (very basic math). However, if you were more active in the position, using certain levels as triggers to take profits or add to your core position, you might've sold half or more of your initial shares around $8 in '06 (still had long-term gains), avoided the painful downturn in '06, bought back when the stock stabilized in '07 around $4.50 and would have a much bigger pile of money to your name. (And yes, I readily acknowledge that it's easier to see this with hindsight and that it's very hard to make these decisions real-time;))
I want to make as much money as possible without taking too much risk and not being too greedy. I've seen too many stocks go up and down to know that it's possible to leave a lot of extra money sitting on the table if I don't take a more active role in managing my portfolio. |
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| Krypton |
| quote: | Originally posted by Shakka
a stop loss doesn't mean you can't buy a stock back if you step back and re-evaluate. It simply means you staunch the bleeding because the market isn't going your way at the moment. But again, your strategy is your strategy and you are a long-term buy-and-hold guy. I have plenty of issues with that approach, but there are plenty of gripes with my approach as well. Simply constructive criticism. |
heh, well, it is an art, not a science..:D |
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| Shakka |
| quote: | Originally posted by Krypton
Traders would find stop losses much more useful because they rely on the movements of the market, not the underlying fundamentals of the assets they buy. |
Also, fundamentals change, not just prices. What was a great bargain yesterday does not necessarily make a great bargain today (Just look at financials). That's why I like to be more proactive. |
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| Dervish |
As you say Shakka it's all about simply selling higher than you bought.
That is if you think it'll dip short term sell then buy back. If it'll go up hold. If it'll dip sell. By cascading triggers and simply waiting for them to do their work you can make a lot of money fairly quickly.
So many times I hear people say "yeah it's going to go lower but I'm going to hold until it come back up". Now if you're in profit are you likely to say that?
No. Why?
Because you don't need this stock to go higher. You don't have to rely on hope which at the back of the guy who is at a loss is constantly saying "hold hold any second it's going to sky rocket and you'll miss out after all this pain..." even though he knows it is going to dip.
I know because I do it. It's not logical, it losses money but it's human nature.
That said it all depends on your view if you are really playing it long term then you should mainly watch are the fundamentals not the share price. Because these are the long term indicators.
Obviously watch the prices but if you are playing long term a few points movement in a day shouldn't matter it's the months movement consistent trends.
And at my level I can't be chucking enough cash at purchases to negate the fees and taxes to day trade, so why be overly concerned about a days trade (unless we are talking a real crash or spike)? |
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| Shakka |
| quote: | Originally posted by Dervish
As you say Shakka it's all about simply selling higher than you bought.
That is if you think it'll dip short term sell then buy back. If it'll go up hold. If it'll dip sell. By cascading triggers and simply waiting for them to do their work you can make a lot of money fairly quickly. |
I don't dispute any of this. It's the discipline part that kicks in when things happen that you don't expect or account for.
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And at my level I can't be chucking enough cash at purchases to negate the fees and taxes to day trade, so why be overly concerned about a days trade (unless we are talking a real crash or spike)? |
I hear you here. I'm not saying daytrade--, that's insane and not worth the stress. But I am saying you need to actively manage your money and not just think you can put something to bed, wake up 5 years later and expect that it will have blossomed into a vibrant garden. You have to pick the weeds from time to time and throw out your losers so your winners can flourish. That's all. And this can be especially true with technology stocks. The tricky thing with tech stocks is that many of them are fast growth stocks, but technologies are always being replaced and a lot of times a high-flying tech company today is an irrelevant collateral victim tomorrow. Does anyone remember U.S. Robotics? Man, modems were so hot! |
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