Thursday, October 21, 2004

A new round of "Strategy Lab" starts tommorow

CNBC's Strategy Lab begins a new round tommorrow. I believe the rounds last 6 months. One thing I really like about this closed competition is that each of the 6 contestants must pick a strategy, stick with it, and provide commentary justifying the stock picks in the open portfolio.

John Markman won the previous round with a 4% gain in his $100,000 contest portfolio. The way Markman picks stocks is probably my favorite out of all of the contestants because he narrows his stock universe with a screening process that he understands, and uses technical analysis to time his buys and sells. While our market timing techniques and stock picks differ, I still feel that Markman is representing strategies like mine in the contest and doing great.

Don Luskin is a sharp guy too and fun to read. Luskin came in second last round with a 3% gain. He uses technical analysis like a black box by relying on market "Buy" and "Sell" signals from his technician friend Fred Goodman. Luskin uses a macro view of the markets by constantly monitoring political developments, currencies, bonds, and many other markets. One thing I've found that works just as well as the "Buy" and "Sell" signals Luskin has told us that Goodman has issued for the market averages is the MACD indicator. When the thick oscilator line crosses over the thin line, you have just witnessed a change in market direction. So simple! Enter the ticker "$compq" on stockcharts.com and check out the MACD at the bottom of the chart.

I don't follow any of the contestants strategies or use any of their picks, but it is always great fun to hear commentary from people who back it up with public real-time trades. If any readers also maintain a trading blog, drop a link in the comments and I'll add it to my Bloglines list of blogs that I read regularly.

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