AXR ==> The Independence Day Winner!

[Lyehopper]

Everyone here should be aware of $$$Mr Market$$$'s "buy and hold" style of investing....

If you can't tolerate a large loss then you should set some solid rules for selling.... and live by them.

[billyjoe]

PTSI was a perfect example of this...down big..came back and beat the market

I can probably name 30 others if you're interested.

Student,
Ernie is correct I believe at least 31 of his picks dropped at least 8% and some way more before coming back to gain 15% or greater. Imagine the loss had he sold those 31 at an 8% loss instead of a 15% gain.
----------billyjoe

[DSteckler]

Imagine the loss had he sold those 31 at an 8% loss instead of a 15% gain.
----------billyjoe

Imagine the gain had he bought them back lower than where he sold them.

[Lyehopper]

Imagine the gain had he bought them back lower than where he sold them.

..... http://new.wavlist.com/tv/027/sf-dingo.wav

[billyjoe]

..... http://new.wavlist.com/tv/027/sf-dingo.wav

Lye,
I don't get anything at new.wavlist.com

billyjoe

[Websman]

As I vaguely said in a previous post, Diversification is an important factor in Mr Markets trading plan. One can afford to take a greater percentage loss if he diversifies his portfolio.

[skiracer]

..... http://new.wavlist.com/tv/027/sf-dingo.wav

Very cool Lye. Is that last one from Saturday Night Live or the actual movie.

[billyjoe]

Imagine the gain had he bought them back lower than where he sold them.

Dave,
Hindsight is usually 20-20. Why don't you tell us exactly what you would have done in the case of the "Mr.Market 31". For every one you'd sell at an 8% stop and not repurchase you've got a minimum 23% loss. Don't tell me you wouldn't have purchased any of them in the first place.

-----------billyjoe

[DSteckler]

For every one you'd sell at an 8% stop and not repurchase you've got a minimum 23% loss.
-----------billyjoe

Why wouldn't you have repurchased them? For that matter, maybe the purchase was made at an extended price and should have been bought at a lower price in the first place?

[billyjoe]

Why wouldn't you have repurchased them? For that matter, maybe the purchase was made at an extended price and should have been bought at a lower price in the first place?

Dave,
I don't understand. You seem to be saying any stock that goes down must have been bought at an extended price and should have been bought at a
lower price , but how would you know that until it has gone down ?

-----------billyjoe

[DSteckler]

I'm not being too clear, Billjoe, so I apologize.

What I'm trying to say is that sometimes, it's better to sell at a small loss and repurchase at a lower price, than B&H.

Timing of the buy is also important. Ernie bought on 7/6. On that date AXR was struggling to stay above its 50DMA and was trading below its 20-day EMA. This is a technical sign that a stock is in difficulty (a better place to buy is when a stock is above the 20-day EMA, 50DMA and 200DMA).

The DMI crossover went negative on 7/5, a further sign of bearish action.

The Volume Flow Indicator had turned negative on above average volume on 7/5 after weakening since 6/29, a sure sign that distribution was underway. Frankly, I still wouldn't buy AXR because there's been no sign that the selling is drying up.

Am I criticizing Ernie's methodology? Not at all - his record speaks for itself. But just because you can make 15% on a stock doesn't mean you necessarily want to experience a 25% or greater drawdown beforehand.

[skiracer]

I'm not being too clear, Billjoe, so I apologize.

What I'm trying to say is that sometimes, it's better to sell at a small loss and repurchase at a lower price, than B&H.

Timing of the buy is also important. Ernie bought on 7/6. On that date AXR was struggling to stay above its 50DMA and was trading below its 20-day EMA. This is a technical sign that a stock is in difficulty (a better place to buy is when a stock is above the 20-day EMA, 50DMA and 200DMA).

The DMI crossover went negative on 7/5, a further sign of bearish action.

The Volume Flow Indicator had turned negative on above average volume on 7/5 after weakening since 6/29, a sure sign that distribution was underway. Frankly, I still wouldn't buy AXR because there's been no sign that the selling is drying up.

Am I criticizing Ernie's methodology? Not at all - his record speaks for itself. But just because you can make 15% on a stock doesn't mean you necessarily want to experience a 25% or greater drawdown beforehand.

I agree with Dave completely an have been stating that same point, along with a few others, that limiting the loss at your initial maximum % and watch and wait for the stock to bottom or drop to wherever you think the point is that it will reverse and turn back up is a tried and true strategy. I bought HOM the first time an it went up and then started to drop. I lost most of the gains but exited for a very small % gain. It dropped on that news that Stocklemon.com put out that IIC (Doug) was spreading around the internet. I exited before I lost all the gains for a very small gain but still liked the stock and believed it could still go back to previous highs. Watched it drop and bought it back at what I thought was the bottom, around $6, and today it closed at $7.25. I'm up over $1.10 or so on 5000 shares. I didn't have 5000 shares the first time around because I bought at a somewhat higher price but the second buy was a bargain an my logic was that if it just went back to near $7 I make a nice gain. If I had held on from my initial entry the trade would still be in negative territory an I would be in a completely different frame of mind about the position. Dave is right in his logic. Not to say Ernie is wrong in any sense of the word. Ernie has his own discipline and strategy and lives by it. There are always two arguements to each concept. But Dave's points are correct and work just the way he says as I illustrated with the HOM position which is now up almost 21%. There is a very big difference.

[diogenes]

I agree with Dave completely an have been stating that same point, along with a few others, that limiting the loss at your initial maximum % and watch and wait for the stock to bottom or drop to wherever you think the point is that it will reverse and turn back up is a tried and true strategy. I bought HOM the first time an it went up and then started to drop. I lost most of the gains but exited for a very small % gain. It dropped on that news that Stocklemon.com put out that IIC (Doug) was spreading around the internet. I exited before I lost all the gains for a very small gain but still liked the stock and believed it could still go back to previous highs. Watched it drop and bought it back at what I thought was the bottom, around $6, and today it closed at $7.25. I'm up over $1.10 or so on 5000 shares. I didn't have 5000 shares the first time around because I bought at a somewhat higher price but the second buy was a bargain an my logic was that if it just went back to near $7 I make a nice gain. If I had held on from my initial entry the trade would still be in negative territory an I would be in a completely different frame of mind about the position. Dave is right in his logic. Not to say Ernie is wrong in any sense of the word. Ernie has his own discipline and strategy and lives by it. There are always two arguements to each concept. But Dave's points are correct and work just the way he says as I illustrated with the HOM position which is now up almost 21%. There is a very big difference.

Which brings to mind the following question:
Has anyone ever examined the Maximum Adverse Excursion of Mr. Market picks?

[casinoboy3]

Why not a stop at 15-20% loss? All of those 31 stocks fell 8%, but i don't think many of them fell 20% or more... a 20% stop would have prevented a loss from stocks like BEL, CNXS, MFLX, KBH, TOL, BBD, (and probably AXR soon) ect. which are over 30%+ now...

82 picks is amazing and most impressive, but I don't care if MM' current IRA value is 100x times what it used to be..... if the current holdings in MM's portfolio keep going the way they are now, the account will be worthless. Whose to say stocks like BEL, MFLX, KBH, etc will ever reach their target?

Another point that I think is important to consider is that there is no more room among the 15 holdings or so for picks like AXR.... assuming MM' IRA is fully invested invested of course. Back a couple of years ago when the streak was just getting started, there was room for "bad" picks to drop, lose value, or take their time to reach their target- because at the same time there were usually other picks reaching the targets and new ones being bought and sold for a profit all the time.

There is no room for that now. FRGB may reach 15% soon, but other then this, it could be awhile before anything reaches it target because they are so far in the red. Even in a bull market, some of these stocks have to double or triple in value before they reach the target and that's going to take awhile. Soon the portfolio is just going to be full of a bunch of losers when in reality MM's stock picking method does work and it could be used to find and make money off real winners. I know MM talked about selling some stocks and ending the streak to find better stocks. What ever happened to that?

I don't know if what I'm saying makes any sense, hopefully someone understands.... I myself am still in college and took advice on opening a roth IRA about 3 years ago. I was up 20% this year. Now, I'm well below where I used to be 3 years ago thanks to stocks like KBH, CNXS, MFLX, BBD, and AXR.

I read how important it is to "save early" and how "every year counts", but I practically just lost 3 years and I think that's pathetic. Like I said, the money is in a Roth, so it's not going to change the way I do anything now. But I don't know whether to continue with stocks or sell what I own and just put it all into ETF's and let it go. ............

[skiracer]

Why not a stop at 15-20% loss? All of those 31 stocks fell 8%, but i don't think many of them fell 20% or more... a 20% stop would have prevented a loss from stocks like BEL, CNXS, MFLX, KBH, TOL, BBD, (and probably AXR soon) ect. which are over 30%+ now...

82 picks is amazing and most impressive, but I don't care if MM' current IRA value is 100x times what it used to be..... if the current holdings in MM's portfolio keep going the way they are now, the account will be worthless. Whose to say stocks like BEL, MFLX, KBH, etc will ever reach their target?

Another point that I think is important to consider is that there is no more room among the 15 holdings or so for picks like AXR.... assuming MM' IRA is fully invested invested of course. Back a couple of years ago when the streak was just getting started, there was room for "bad" picks to drop, lose value, or take their time to reach their target- because at the same time there were usually other picks reaching the targets and new ones being bought and sold for a profit all the time.

There is no room for that now. FRGB may reach 15% soon, but other then this, it could be awhile before anything reaches it target because they are so far in the red. Even in a bull market, some of these stocks have to double or triple in value before they reach the target and that's going to take awhile. Soon the portfolio is just going to be full of a bunch of losers when in reality MM's stock picking method does work and it could be used to find and make money off real winners. I know MM talked about selling some stocks and ending the streak to find better stocks. What ever happened to that?

I don't know if what I'm saying makes any sense, hopefully someone understands.... I myself am still in college and took advice on opening a roth IRA about 3 years ago. I was up 20% this year. Now, I'm well below where I used to be 3 years ago thanks to stocks like KBH, CNXS, MFLX, BBD, and AXR.

I read how important it is to "save early" and how "every year counts", but I practically just lost 3 years and I think that's pathetic. Like I said, the money is in a Roth, so it's not going to change the way I do anything now. But I don't know whether to continue with stocks or sell what I own and just put it all into ETF's and let it go. ............

I think that what you are saying makes plenty of sense. What I don't think you have realized yet is that you have to determine your own discipline and strategys. Following MM has proven to be great for most everyone here over the course of 3/4 years. There is nothing that says you have to do exactly as he does, buy what he does when he does, or hold through the times that he does. Your problem, if you want to call it a problem, is that when you are following MM's lead or anyone's lead and they go on a bad streak you can't say anything bad about their strategy because you followed it. Ernie never talked you or anyone else into buying on his lead. You followed what you thought was going to be a winner. You have to start studying the entire breadth of the markets. You should know about all of the different vehicles to trade and about both sides of analysis. Technical and fundamental analysis an how they can work together and by themselves. Until you do that and understand that in all of this you cannot blame anyone else for losing your money or the shape you are in because you followed their lead. You had better start studying and learning everything you can about all of this and learn to do it for yourself first before you follow anyone else. And don't be worrying about Ernie's portfolio. It's none of yours or mine or anyone else's business except for maybe Mrs. Ernie. Let Ernie worry about those losers he's holding the the money lost. You sound like you're at the end of your rope. You haven't experienced anything like what could happen to you in life much less trading. You are sounding like you could be close to giving in instead of analyzing what went wrong and what you could do to make it right. That makes you easy picking for millions of other traders out there in the markets everyday.