A New Plan

[billyjoe]

I'm going to start a new investing plan based on the assumption that low priced stocks are more volatile than high priced stocks and therefore offer a greater chance to make big gains and big losses.

1. Each month put $1000 into a low priced stock (under $10, usually under $5) that displays unusually good fundamentals. Some technicals will also be thrown into the mix.

2. In most cases these will be long term holdings. Could be over 2 years. Maximum 24 stocks, one each month for 2 years.

3. Stocks will be sold at 25% loss or 100% gain.

4. At the 24 month mark stocks will be re evaluated and held or sold regardless of performance.

5. Will aim for a 40% or greater success rate. If this proves unsustainable portfolio will be liquidated after first 12 months.

6. At 40% success rate gains for the first 24 picks should be in the 28% range annualized at 14% per year.

I will keep a real time record starting sometime this month. Do you think this has a chance of being successful?

-----------------billy

[Louetta]

Billy, why sell at 100%? If the fundamentals still look good why not continue to hold it? So what if it's now outside your $10 range. As a compromise sell half at 100% and "now you're playing with house money" as they say. I don't agree with that philosophy but you're at least letting some of your profits run. Also, many funds can't or won't buy low-priced stocks so when you get up nearer $10 new money may come in, listings may get upgraded, that sort of thing.

[billyjoe]

Louetta, Good points. I will be able to do a rudimentary look at fund holdings. My small local bank which I've held from under 4 to over 10 continues expanding hoping to crack the 2 billion market cap maybe within the next 12 months. their fund exposure is steadily growing. My home made fund will become self sustaining at some point at which no new money will be added. I'll tweak it along the way and scrap it if need be. There must a plan. Brings to mind one of my favorite palindromes. A man, a plan, a canal, Panama.
-------------------billy

[riverbabe]

As you are probably aware, Zacks has a "Stocks Under $10" portfolio. Talk about volatility! Currently has 14 stocks, with a 15th sold yesterday. The comments were, as follows: "(Ticker) reported after the close last night and it was not good. The company missed and lowered guidance so the stock was down big in after hours and still is this morning as a downgrade came in. This is the problem with low priced stocks, in that when there is a rush for the exit the stock really falls hard." Not my cup of tea. My ticker probably couldn't take it.

[billyjoe]

River, When I had access to Zacks I compared their under $10 list to Cramers under $10 list and the highest rated under $10 from Vectorvest. Maybe threw some Motley Fool in the mix also. I was surprised at the few that appeared on more than 1 list. You're making me have 2nd thoughts on this project.

------------------billy

[IIC]

Here ya go Billy...Stocks that started out the week under $10.00 from the IIC 100...After 3 days... 6 up 2 dn 1 unchgd...Average change +9.89%

Doug

[riverbabe]

Here ya go Billy...Stocks that started out the week under $10.00 from the IIC 100...After 3 days... 6 up 2 dn 1 unchgd...Average change +9.89%

Doug

I think he is thinking long term? He can answer that.

[billyjoe]

My plan is like the Fed. Might make a move tomorrow or next month or next year, but I'm definitely going to do something.

--------------billy