|
PureBytes Links
Trading Reference Links
|
Jim, your answer sits fine with me. Just wanted to know how someone else
solves a problem that keeps me out of most high-flying stocks.
Simultaneously selling Covered Calls during market corrections when implied
volatility is very high has worked well for me when stops would have to be
too far out otherwise. But during bull moves I have to sit out on stocks
like those in the internet group.
We both want to go investment heaven. I just follow a slightly different
religion. Let's just hope our bet on AOL can take us both to the Pearly
Gates without a trip thru the Fires of Hell :-)
good luck,
Rick
-----Original Message-----
From: Jim Greening <JimGinVA@xxxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Monday, August 10, 1998 8:55 AM
Subject: Re: Weekly Pick
> The answer, which probably isn't a very good one, is that I just
>won't set percentage stops. I've read all the books on
>portfolio/money management and setting stops, but pure percentage
>stops just never made good sense to me. I firmly believe that stops
>should be set based on some valid technical barrier or condition such
>as a congestion area or outside the boundary of a trend channel. In
>this case, to me, there just wasn't a valid place to set a stop any
>closer then 96 3/4. I will move it up under the intermediate term
>channel as soon as I can and will switch to a Short Term Up Trend
>Channel (STUTC) just as soon as I have enough data for a STUTC that
>looks valid to me. In the meantime, I'll just accept the 13.5%
>position risk. I did compensate somewhat by setting my position size
>to 10% of my portfolio which limits my portfolio risk to
>((111.875-96.75/111.875)*.1 or 1.35%.
> Hope that makes sense <G>.
>
>Jim
>-----Original Message-----
>From: Rick Mortellra <rmjapan@xxxxxxxxxxxxxxx>
>To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
>Date: Sunday, August 09, 1998 9:05 AM
>Subject: Re: Weekly Pick
>
>
>>Hi Jim,
>>
>>I got into AOL on Wed. 8/5 at the same 111 level. Fortunately, I
>didn't get
>>to experience the heart attack of watching it plunge to 97.5 shortly
>>thereafter since I was sound asleep. Living 13 time zones away has
>its
>>trading advantages :-)
>>
>>FYI, I use Maximum Adverse Excursion to determine my Stop Loss
>levels.
>>However, its suggested stop of 103 put it well outside my money
>management
>>guidelines. Luckily implied option volatility was at a peak that day
>and I
>>was able to take some nice premium selling covered calls that allowed
>me to
>>still take the trade and juice my upside too.
>>
>>I guess my question is, how do you work a nearly a 15% drop from 111
>to your
>>stop of 96.75 under your money management rules?
>>
>>very curious,
>>Rick
>>
>>
>>-----Original Message-----
>>From: Jim Greening <JimGinVA@xxxxxxxxxxxxx>
>>To: Metastock <metastock@xxxxxxxxxxxxx>
>>Date: Sunday, August 09, 1998 3:57 AM
>>Subject: Weekly Pick
>>
>>
>>
>>> AOL at 111.875 is in a long and intermediate up trend and just
>>>broke out of a Short Term Down Trend Channel (STDTC). The top of
>the
>>>ITUTC is at 150 and the bottom is at 97. It hit an all time high of
>>>140 1/2 on 7/21/98 and then pulled back to the bottom of the ITUTC
>>>during the day Wednesday. From their it started back up and broke
>out
>>>of it's STDTC on good volume Friday. The indicators support my
>theory
>>>that a short term trend change is in progress. This is a pure
>>>momentum play on an internet stock so, as expected, the Price/Sales
>is
>>>extremely high at 10.94. The rest of the fundamentals look good
>with
>>>Debt/Equity of 0.84, 27% insider ownership, actual earnings this
>year,
>>>and five year average annual growth of over 100% and this years
>>>revenue growth still over 50%. I'll set the target just under the
>top
>>>of the ITUTC at 149. I'll set the initial stop just under the
>bottom
>>>of the ITUTC at 96 3/4. Once there is enough data for a good Short
>>>Term Up trend Channel (STUTC), I'll move the stop up to under it.
>>
>>
>
>
>
>
|