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| Grimreaper |
 Posted: Sun Apr 29, 2007 2:51 am Post subject: Diversified vs trading the moves |
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CFO
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I've been doing my little experiment ova yonder at Virtualstockexchange.com to see if it is better to diversify amongst a large number of what I feel are great long term value plays with small bets on each....or trade the swings in indivdual stocks with much larger bets in a smaller number of stocks. I have 2 ports setup. One is a watchlist where I started with $10K. I only go long in that port. I began by making $500-$700 initial bets and I also doubled into those positions if it turned out my initial entry prices were proven incorrect and the stock moved lower. I did not add on strength....I only took profits. So far that portfolio is up 110%+ (including commission costs) since the beginning of the year. My trading port had an initial bankroll of $1 million. There I go both long and short but I make bets that put me in a postion where up to 30%+ of my port is in a single issue. It has been open for well over 1 year and it is currently up only 160%+. Of course that port has been heavily weighted to the short side predominantly....which may be a reason why it has underperformed in an up mawket.    I have now increased the amount of my initial investments to $1000 per buy in my long term nontrading account so it is an ongoing experiment. But I am almost convinced that it pays better in the long run to stay diversified. I have found that even when a stock gets deeestroyed (I bought HDTV at .45 and held the collapse to da .20's, but sold out on the move back up to my buy point) the rest of the value plays have kept da entire port on an upward moving path. I realize that my skills in spotting bottoms AND tops means my returns will more than likely beat the average investor....since averaging into the wrong stock at the wrong time will prove disasterous over time. But even though I tend to make better entry decisions than most....I still say it is better to diversify and hold for the long term as opposed to trading in and out. And I'm wreckin that anybody who is trying to trade GOOG, CSCO, F, OVTI, anything really in current mawket conditions...is now finding that out.  |
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| Kingpin |
| Posted: Wed May 02, 2007 4:20 pm Post subject: |
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Investing Associate
Joined: 15 Jan 2007
Posts: 29
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are you talking about buying on the open or close to it with the knowledge that your pick will rise during the day atleast a little.
i have a spreadsheet working that shows me how much a difference between the open and the high for the day was.
even stocks that close lower are still getting a pop of 20, 30 40 cents .
if you have data showing that your stock will rise some during the day , is it a wise trading strategy to jump in and wait to make a few pennies and get out ? |
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| Kingpin |
| Posted: Wed May 02, 2007 4:22 pm Post subject: |
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Investing Associate
Joined: 15 Jan 2007
Posts: 29
This Month: 0
14853.25 e$
Net worth: 14,853.25
Portfolio Value: 0.00
Monthly Return: 0.00%
Trades this month: 0
Churn Rate: 0.00%Items
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reaper , disregard my other post.
after re-reading your topic , what i wrote has nothing to do with what you wrote .
sorry. |
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| Grimreaper |
| Posted: Wed May 02, 2007 6:16 pm Post subject: |
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CFO
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| Kingpin wrote: | are you talking about buying on the open or close to it with the knowledge that your pick will rise during the day atleast a little.
i have a spreadsheet working that shows me how much a difference between the open and the high for the day was.
even stocks that close lower are still getting a pop of 20, 30 40 cents .
if you have data showing that your stock will rise some during the day , is it a wise trading strategy to jump in and wait to make a few pennies and get out ? |
VSE allows you to set limit buys at particular prices. I always have a target entry price in mind for every single stock I buy....and of course I rely on the support/resistance price points I have logged on all stocks I follow to tell me where to sell...although da chawts will sumtimes cause me to sell before or after a tawget is hit. The stocks on my watch list where orders were executed are long term plays in generul. For instance....I still own BMD which I bought at the 52 week low and I plan to add on the current pullback....I already took the majority of my position off as I believe I only own 100 shares now. VSE is kewel cuz ya kin use limit orders.....although sometimes kinks in da software prevent orders from gettin filled. I'm still 18% short JSDA even though my limit sell at 24.00 was taken out by $2 bucks....plus da beeeyotch gonna take out da 52 week high too!  |
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| Im Not Warren Buffett |
| Posted: Wed May 02, 2007 6:39 pm Post subject: |
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CFO
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| I would say that, in terms of diversification, holding about 6 stocks is probably ideal. I rarely have more good ideas than that anyways, and I think 10 is probably the absolute upper limit. |
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| Grimreaper |
| Posted: Thu May 03, 2007 2:50 am Post subject: |
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CFO
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| Im Not Warren Buffett wrote: | | I would say that, in terms of diversification, holding about 6 stocks is probably ideal. I rarely have more good ideas than that anyways, and I think 10 is probably the absolute upper limit. |
I see no reason to sell any stock that has put in DA BOTTOM and I have already dubled my money based on entry price. For instunce, since SFLK is now putting in long term DA BOTTOM, I will sell 1/2 at .14 and hold the rest until a long term topping signal comes in....or Jim Cramer says buy. It doan mattah ta me whether I am holding 6 stocks or 600 stocks ifn they all have put in long term DA BOTTOM and I have "free" shares.  |
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