Monday, February 28, 2005

Interesting discussion from IBD's message board

Tuneman starts the thread:


  • Move money from laggards to winners... This was the key line mentioned in Big Picture today to maximize gains. How do you do that when the rally keeps rotating into sectors. Semi's rally for 2-3 days and then Internets follow, then a few days later Healthcare rallies.


and a great response from 8eight8 (bold added by me):


  • I got quite a chuckle over IBD's advice. How many times do you see the "leaders" get smashed more than so-called laggards at the first sign of profit taking. Park your dough in those leaders, huh? You are much better off diversifying because those laggards can pop up when leaders extend too far and institutions need new places to put cash. All this goes to heck when earnings come around anyway. Babysitting your leader for 3 months can evaporate in one or two days on bad earnings. CANSLIM is only an 8-week play: after earnings announced and during a bull run...then GET OUT.


ncep adds another great reply:


  • Your crazy if you put all your trust in canslim, after all its only a shallow version of real technical analysis which by the way is not that technical! Study a few books and you will see that making money by looking at charts is not that hard and you do not have to keep losing money by buying high and trying to sell higher!

5 Comments:

At 4:30 PM, Anonymous Anonymous said...

Wow Jon, must comment here. I am one of the regular lurkers and occasional questioners on the Paper Asset thread on RDPD.

I started paper trading this year and in the past couple weeks I have been experimenting with different technical indicators and using CANSLIM for a head nod.

I'm so green, I didn't know if it was the right thing to do, but I realized that I didn't want to just trade in an up market. And I've been reading also about position sizing and efficiency, some things not mentioned by O'Neil.

It's a good primer, what else would you suggest?

 
At 4:46 PM, Blogger jontait said...

I like a lot of things about CANSLIM, and the IBD newspaper is great, but its like you said, CANSLIM is a good primer. If you haven't read Stan Weinstein's book "Secrets for Profitting in Bull and Bear Markets", I recommend it. If you've read O'Neil's "How to Make Money in Stocks" then you will have a great foundation for Weinstein's book.

I also like Jack Schwagger's "Market Wizards" series of books because a _lot_ of money managers are interviewed, so you get exposure to all sorts of great ideas and market culture.

My all time favorite though, "Reminiscences of a Stock Operator" =)

Thanks for the comment!

 
At 4:48 PM, Blogger jontait said...

I forgot to ask you what paper assets books you've read so far that you like. I'm always looking for great books to read.

 
At 12:44 PM, Anonymous Anonymous said...

Just HTMMIS and The Neatest Little Guide (Beginner baby book for fundamentals).

Most of what I am learning is by reading Trader Mike's blog and stockcharts.com Chart school.

Mike recommended Trade your Way to Financial Freedom by Van Tharp to learn position sizing and money management. That's what I was heading to next. I'll probably detour and check out Weinstein's before.

Thanks for responding. I really value you opinion and suggestions.

 
At 6:11 PM, Blogger RICLAND said...

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