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MMille2335 wrote:
> If you had to restrict your trading to only five stocks which would you
> select.
YHOO, DELL, MSFT, INTC, ASND - without thinking about it too much.
> I trade from an intermediate time frame and have found that I trade better
> when focusing on a small group of securities...become initimately familiar
> with behavior of those securities.
Since this is your preferred style, this wouldn't be a bad approach at all.
However, I wonder how intimate one would need to be to trade intermediate term.
> Its like someone said- -put all your eggs
> in one basket and watch that basket very closely.
This is a good strategy generally if you are comfortable with the approach.
Diversification does have its place - mostly to ensure lot sizes are small enough
for efficient entries and exits.
> I believe one of the reasons most funds underperform is because funds are too
> diversified- -own too may securities.
Depends what you mean by underperform. If we're talking the SPX, its partly due
to having a percentage in cash - but the biggest challenge by far is overcoming
the tremendous slippage they encounter on both ends due to the huge positions they
are forced to maintain.
> Intel is one security that has, IMO, the qualities make it a good security for
> speculation and is in my five. It has good volatility, you can make money
> trading on shorterm time frame, and it has good trending characteristics. It
> also has sufficient liquidity and institutions ownership.
Agreed. I'd say the most important thing is the way a stock sets up to your
preferred trading method - you don't necessary need the liquidity of an INTC for
intermediate term trading - as long as you can typically get your size in at a
good price would do just fine.
Regards,
A.J.
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