New Kid in Town -- My market strategy for maximizing profits

[The Kid]

Hi there. New Kid to these parts. I look forward to sharing stock thoughts, strategies and profits with all of you.

While I am sure we are all here because we enjoy a little fun with our financial advice, and would love to one day meet the Huge One himself, to shower him with fine meats and cheeses to thank him for all the money we have made through all his wise investment picks , I am sure the majority of you are mainly here for one objective -- to make money, lots of it. With that in mind, I will share with you my own personal plan for maximizing my profits based on the Huge One's selections.

I realize that many people on the internet make selections after some sort of information has peaked their interest. That info. may have come from a news story, a trend, or any number of variable sources. Most likely the internet selector of a particuliar stock was not the only one to see/hear the info. With that in mind, instead of buying when the great Huge One buys a stock, I will wait a day or two until the stock 'let's off a little steam.'

Now, I know many of you are laughing at me saying that I will miss the boat with that strategy on some of the high-fliers that just keep taking off. I understand that. If I had not come to this website, I would not even know of their existence. My practice is a simple one that reduces risk if the recommended stock is a dog (though I would never expect that of the Huge One's selections ,) while allowing me to maximize profits if the stock does see the appreciation (15% gain) predicted by the esteemed creator of this website. Following along? If you look at the last three stocks selected on this website, CLSR, CCBI and DHI, you will see that all three of them have fallen below the price at which the Huge One purchased them, yet have not yet reached the projected 15% gain sell point. If you like the advice offered for buying the selections, it would be logical to believe that buying them NOW would make even more sense. Isn't buy low(er), sell high, good sound financial advice?

In other words, I will never buy a stock at a price above that paid by the Huge One. I will buy the stock at a lower price, but before it reaches his target price. This practice will allow me to limit my downside potential and make sure that I never but at the exact top of a momentum play.....which, as many of you know, is a sad, sad thing when it happens to you. As stated above, I understand that if the recommended stock continues to rise from the moment the Huge One buys it, I will not get in on the fun and money-making. But if there is a dip, and the stock still rises to the 'announced' level, I will make even more money on that stock then the Huge One himself. While I humbly say that I would be a little embarassed by that prospect, I can assure you it is an occurrence I (and my stock account) would love to see happen over and over again.

With all that in mind, and to conclude my first (long-winded) post on this wonderful web-site, following my own personal plan, here are the stocks I purchased near close today (Monday - 11/10/03.) Feel free to track my progress and comment on my strategy.

Purchased CCBI @ 19.29 -- That is 4 1/2% less than the $20.20 that the Huge One paid. I can see a 15% gain at $22.18 and get out, or wait until the Huge One's target of 23.30 before I sell -- at which point I would have an almost 21% gain!

Purchased DHI @ 39.20-- That is 2 1/2% less than the $40.23 that the Huge One paid. I can see a 15% gain at $45.08 and get out, or wait until the Huge One's target of 46.42 before I sell -- at which point I would have made more than 18% profit.

Good luck and happy investing!

The Kid



NOTE - I EDITED THIS ON 11/25 TO CORRECT THE TITLE TO READ 'MARKET' AND NOT 'arket' AND TO CORRECT THE USE OF BOLD IN LAST TWO PARAGRAPHS. NOTHING ELSE WAS CHANGED.

[casinoboy3]

Re: New Kid in Town -- My arket strategy for maximizing prof

Purchased CCBI @ 19.29 -- That is 4 1/2% [/b]less than the $20.20 that the Huge One paid. I can see a 15% gain at $22.18 and get out, or wait until the Huge One's target of 23.30 before I sell -- at which point I would have an almost 21% gain!

The Kid

haha on my first day of investing I buy this stock and it goes down 8%. (did it in the morning) I hope it'll go back up!

[stenzrob]

Kid,
Let's assume that half of MR_Market's picks go up after he buys them, and half go down by some amount. If you miss the half that go up entirely, you would have to do twice as well on the ones you got into cheaper.

And why wouldn't your logic work one more time, "I will buy the MR_Market picks only after The Kid does, and only for a lower price." Wouldn't this logically lead to even better results?

And why did you buy at the point that you did, just because it was cheaper than the HUGE entry point? Was there some technical reason for your selecting that buy point?

I'm always ready to learn from the experiences or thoughts of others, and there is no disrespect intended here, but I just don't see where your method is so much a method as it is a convoluted way to point out that the HUGE picks don't always go straight up.

[the_daqman]

is that you Bec

[tx_damnyankee0]

Gotta be Bec

[Karel]

Well, who knows; a first post and a poll too is a bit strange, but who cares. It isn't a very illogical observation for someone who only just has learned about MrMarket's picks, although this anonymous person @ yahoo.com obviously has some more thinking to do, as explained by stenzrob.

Regards,

Karel

[The Kid]

My first - of many - discussions with the Stenz

Stenzrob,

No disrespect was taken. I, the new kid on the block, can obviously not speak for any other members here, but I can speak for myself -- and I am here for one reason -- to make money. I am not here to engage in silly internet ego battles nor to show off who has a bigger willy (in this case, stock portfolio. ) I am here to learn, share, express ideas and selections (often with people MUCH more knowledgable than I) and...to make money!

With that in mind, I answer your questions. First, I don't agree with your very first sentence which assumed that half the Huge One's selections would go up and half go down immediately after he bought them. I hate to assume much of anything when dealing with the market. I know many people who assumed an awful lot back in June of 2000 and now wish they had not.

Remember, the plan offered by me in my initial post is exactly that.....a plan. I apologize if I called it a strategy, for it really is not. In my plan, according to what I have seen of the limited number of the Huge One's stocks I have followed, many of them have indeed gone down in the hours/days after he bought them. As I said, I am not here to argue. If you wish to go back and check his last ten - fifteen selections and see this, feel free. I believe more have gone below his purchase price before reaching his 15% gain 'sell' price than have gone straight up to that mark. Therefor, I disagree with your first assumption.

As for re=applying my plan and someone getting in below the price that I bought a given stock at, that, with all due respect, is just plain silly. Obviously, and I am sure you know this, there is a law of diminishing returns as far as to following that advice. Keep carrying out that scenario and if Mark buys below Jim (or tries to), and Sally buys below Mark, and Kimani tries to buy below Sally, and Bartholomew buys below Kimani, and Bartholomew attempts to buy below......well, I guess you get the idea. Eventually poor Kaneesha is trying to buy the same stock at 1 penny, a price so low it would probably never happen and if it did...I think we would all admit at that point that the stock is (was) a dog.

Which brings me to your third point. I admit there is no formula or statistic or computer-generated buy point at which I enter. It is purely a 'feel' thing. I understand you place an awful lot of technical analysis into your selections and I truly appreciate your diligence, however you must admit that if making money in the market was as simple as throwing numbers in a computer, well, then you wouldn't be here right now, would you? If that is all that was involved, you would already be as rich as you wanted and you would be living on the same island as the man who invented the pet rock.

No, as we all know, there is an emotional side of buying and selling as well. If you want to call my 'feel' point at where to get in a 'convoluted way of saying not all of the Huge One's stocks will rise after he buys them', so be it. Call it that. I do not mind. I call it a 'feel'. If you ever figure out a way to take the emotional side, the 'feel' thing, the intangible, totally out of profitable trading, please let me know. I will gladly give you half my portfolio and easily get it all back with computer-driven trades in one day.

Lastly, you will note on your Stenz thread that I, using my 'plan', have just purchased VLGC at $1.84, about 8 1/2% below your entry point. If it moves a little later this afternoon, it is feasible that I could sell it at a 9% gain before you see one penny of profit. Feel free to argue with that.

Again, no disrespect intended in any of this. I understand that using my plan I will miss the rocketships that go-go-go! With the Huge One's advice, I would be selling at a 15% gain anyway. I like my lower downside/larger upside on the stocks I do buy over the 'what-ifs' if I occasionally miss a rocket that I would be selling (according to the Huge One's advice -- not yours) at 15%. (Getting back to your first point, you totally oversimplified the math by saying I would need twice the winners, etc. as percentages are the key here -- [/i]not numbers.)

I recognize and appreciate the stock-picking abilities of you and the Huge One. I follow it, do my own due diligence, throw in my 'feel', and make my selections. I have made profits on companies as large as Lucent (was there ever a bigger screaming BUY SIGN than when LU was at sevety-five cents a share?) and as small as that one you all hate to see -- Applied Digital Solutions, yes, ADSX. Call it a dog, but I made a lot on that perennial dog. My point is that I like your thoughts and expertise in computer-screening and I wish nothing better than for there to be NO ONE on this site in two years!! (Because we are ALL living on the same island as the man who invented the pet rock, drinking margaritas and passing the suntan lotion. )

Happy and prosperous trading to all.

The Kid

[stenzrob]

Good luck with your plan.

[stenzrob]

Re: My first - of many - discussions with the Stenz

First, I don't agree with your very first sentence which assumed that half the Huge One's selections would go up and half go down immediately after he bought them.

That's why I called it an assumption.

As I said, I am not here to argue.

Yes, I can see that.

If you wish to go back and check his last ten - fifteen selections and see this, feel free. I believe more have gone below his purchase price before reaching his 15% gain 'sell' price than have gone straight up to that mark.

Since your plan is based on the odds that it will go down after he buys it, it seems to me that it would be more in your interest to perform this research than it would be in mine, since I actually own zero of the HUGE picks.

As for re=applying my plan and someone getting in below the price that I bought a given stock at, that, with all due respect, is just plain silly. Obviously, and I am sure you know this, there is a law of diminishing returns as far as to following that advice.

No sillier than only buying HUGE picks if they go down.

I think we would all admit at that point that the stock is (was) a dog.

Ernie wouldn't bail, he would hold it for as long as it takes to get the 15%.

Which brings me to your third point. I admit there is no formula or statistic or computer-generated buy point at which I enter. It is purely a 'feel' thing. I understand you place an awful lot of technical analysis into your selections and I truly appreciate your diligence, however you must admit that if making money in the market was as simple as throwing numbers in a computer, well, then you wouldn't be here right now, would you?

You're clearly familiar with my screen and my (admittedly sometimes inconsistent) methods for buying or selling candidiates from the list generated by the screen. Do you really believe that my TA is computer generated? The screen is generated by "throwing numbers into a computer", the buying and selling is based on my human interpretation of the market psychology for that stock as revealed by the price & volume. Do you hear me going on & on about MACD or stochastics or second differentials of the moving averages divided by the alpha rate of decay?! It's all about price & volume.

No, as we all know, there is an emotional side of buying and selling as well. ... If you ever figure out a way to take the emotional side, the 'feel' thing, the intangible, totally out of profitable trading, please let me know. I will gladly give you half my portfolio and easily get it all back with computer-driven trades in one day.

You seem to correlate trading without emotion with using a computer to determine buy and sells. TA is not performed by computer, though secondary indicators are. I like to think that I do trade without emotion for the most part. It's just stocks and money to me. I don't "hope" that companies do well, I don't hold onto stocks if the chart doesn't support it. I will sell a stock that I have concluded won't outperform the market over the next two to three months and I don't care whether I'm up 5% or 150% or down 5% or 30%. I am only interested in having my money invested in the 5 or 6 stocks that I feel have the greatest chance of explosive price appreciation in that time period, going forward.

Lastly, you will note on your Stenz thread that I, using my 'plan', have just purchased VLGC at $1.84, about 8 1/2% below your entry point. If it moves a little later this afternoon, it is feasible that I could sell it at a 9% gain before you see one penny of profit. Feel free to argue with that.

Yes, you already mentioned that this wasn't about ego or a pissing contest for you.

[talkingrobe]

A little diff...

The Kid,

I have a little different approach. I have my own picks long term and some in and out stocks.

Then I have MM HUGE picks. I try to buy after checking them out. Most of the time I get around to buying later on that day or the next. Sometimes that's good. Sometimes not. That is just because of timing.
If the stock takes off...well great! I just keep what I have.
If the stock goes down too much after I bought it (and I still like the stock). Then I have enough funds to buy more positions.
This way my percent is better at the target price. I also get in on the hot stocks.
So my last 4 trades were done at 20%+.

Strenzrob picks are good also. I buy some and wait to see what happens. I usually sell any position at 20%+.
That is just my comfort zone...nothing else.

Good luck,

[Risky]

Hot one????

Stenz...what's on the hotseat?

[The Kid]

Hey Risky,

Stenz has his own thread for asking him questions.

The Kid


(By the way, Stenz, I agree that your style of selecting stocks is not solely computer-generated. I apologize if it seemed that is what I insinuated. )

[MEA_1956]

Hey Risky,

Stenz has his own thread for asking him questions.

The Kid


(By the way, Stenz, I agree that your style of selecting stocks is not solely computer-generated. I apologize if it seemed that is what I insinuated. )

IMHO You are rude little KIDD that needs taken out behind the barn and have your Moma teach you a little respect and courtesy. It seems to me you are the only poster that has to offer an Apology in his post.===>MEA

[The Kid]

Mea,

You think that I need to be taught a little respect and courtesy? It was not me that wrote -

"Yes Earnie, and thank you. when he posts don't listen.===> MEA"

that disrespectful post lacking courtesy was written by you.

Since I do have respect, courtesy AND a sense of humor, I will not point out your spelling errors. I will point out, however, that I have never written anything about, or to, you, until prompted by your second post concerning me. If you are offended by my posts, I recommend that you kindly take your own advice and "don't listen." Any other chosen path may lead you to a road you do not wish to be on.

Happy stock-picking,

The Kid

[stenzrob]

It seems to me you are the only poster that has to offer an Apology in his post.===>MEA

I would like to apologize for not having apologized earlier.