Picking and choosing stocks
Much can be said about some of the more glaring examples of where my system doesn't work (AKAM - got out too soon). Most of the bigger misses have been related to trading decisions - when to get in or out.
From an overall investment selection, we have substantially more wins than losses. For example, on January 15 I offered a review of 22 stocks. My opinions ranged from pass/sell to wait. I'll show the detail in a moment - here's the summary.
Wait - 10 stocks, only 1 went up (and only 2%).
Pass - 9 stocks, 2 went up (5% and 15%).
Pass/Sell - 3 stocks, all down (11%, 18%, 8%)
I was wrong 3 times out of 22, about 15% of the time. One of my wrong calls went up 15%. My point is that there will always be those examples of the one that got away (AKAM - getting stopped out at 21.8 and making a judgement call to get in AFTER earnings, only to watch it surge 25% to $27). Venture Capitalists and Hollywood put there money on multiple horses and rely on one or two major winners to offset the dozens of losers. My strategy is that I'd rather be good at cherrypicking the winners and great at avoiding the losers. (OK - speaking honestly, I'd rather be great at both.)
With LiveRocket, we've chosen 26 stocks of which 8 are currently money losers (3 of them were bought in the past few days and should be positive shortly). That's a win 70% of the time (and potentially 80%+ as these new stocks settle down). Of our wins, 8 yielded 10%+ and a further 6 yielded 5%+. In just a few months. I call that good. Great would be 50% yielding >20%.
Here's where my January predictions landed 6 weeks later.
PWR – Wait and buy on weakness. No change
JBLU – Wait and buy on weakness. Down 10%
WFMI – Wait and buy on weakness. Down 12%
SRZ – Wait and buy on weakness. Up 2%
RMD – Wait. Up 6%
CERN – Wait for dust to settle. Down 8%
BCSI – Wait. Down 50%
VDSI – Wait. No change
DESC – Wait. Up 11%
USAK – Wait. Up 2%
RTLX – Pass. Down 4%
TNH – Pass. No change
CMTL – Pass. Down 3%
GYI – Pass. Down 6 %
SRCL – Pass. Up 5%
CTSH – Pass. Up 15%
UNH – Pass. Down 2%
MOT – Pass. Down 10%
ISRG – Pass. Down 30%
CRM – Pass or buy puts. Down 11%
ACL – Pass and sell. Down 18%
BMHC – Pass or sell. Down 8%
From an overall investment selection, we have substantially more wins than losses. For example, on January 15 I offered a review of 22 stocks. My opinions ranged from pass/sell to wait. I'll show the detail in a moment - here's the summary.
Wait - 10 stocks, only 1 went up (and only 2%).
Pass - 9 stocks, 2 went up (5% and 15%).
Pass/Sell - 3 stocks, all down (11%, 18%, 8%)
I was wrong 3 times out of 22, about 15% of the time. One of my wrong calls went up 15%. My point is that there will always be those examples of the one that got away (AKAM - getting stopped out at 21.8 and making a judgement call to get in AFTER earnings, only to watch it surge 25% to $27). Venture Capitalists and Hollywood put there money on multiple horses and rely on one or two major winners to offset the dozens of losers. My strategy is that I'd rather be good at cherrypicking the winners and great at avoiding the losers. (OK - speaking honestly, I'd rather be great at both.)
With LiveRocket, we've chosen 26 stocks of which 8 are currently money losers (3 of them were bought in the past few days and should be positive shortly). That's a win 70% of the time (and potentially 80%+ as these new stocks settle down). Of our wins, 8 yielded 10%+ and a further 6 yielded 5%+. In just a few months. I call that good. Great would be 50% yielding >20%.
Here's where my January predictions landed 6 weeks later.
PWR – Wait and buy on weakness. No change
JBLU – Wait and buy on weakness. Down 10%
WFMI – Wait and buy on weakness. Down 12%
SRZ – Wait and buy on weakness. Up 2%
RMD – Wait. Up 6%
CERN – Wait for dust to settle. Down 8%
BCSI – Wait. Down 50%
VDSI – Wait. No change
DESC – Wait. Up 11%
USAK – Wait. Up 2%
RTLX – Pass. Down 4%
TNH – Pass. No change
CMTL – Pass. Down 3%
GYI – Pass. Down 6 %
SRCL – Pass. Up 5%
CTSH – Pass. Up 15%
UNH – Pass. Down 2%
MOT – Pass. Down 10%
ISRG – Pass. Down 30%
CRM – Pass or buy puts. Down 11%
ACL – Pass and sell. Down 18%
BMHC – Pass or sell. Down 8%
posted by Andrew at
9:10 AM
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