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<DIV><FONT face=Arial size=2>Thanks all for the positive
comments on my proposed method. I'd like to reply to these
comments </FONT></DIV>
<DIV> </DIV>
<DIV><STRONG><FONT face=Arial>"The big pitfall is of course it the market
heads south in a big time way. It would be of little consequence to have the
right stock which fell the least."</FONT></STRONG></DIV>
<DIV><STRONG><FONT face=Arial>"I must say I've never seen a horse race
where the horse's might suddenly all turn and run back the other
way"</FONT></STRONG></DIV>
<DIV><STRONG><FONT face=Arial>"Fully invested all the time...well you
better have the stomach to be fully invested in Sept/Oct 98 or Oct
97"</FONT></STRONG></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial><FONT size=3>It's true if the lead horse your on falters
you could be in for a scary plunge staying with it untill it is passed by your
relative stop (second horse in the race) which might also be back tracking, just
not as fast. But by staying in the race you'd avoid the mistake my father did in
Oct of 97. He panicked and sold right at the bottom missing the recovery
completely. Crashes are few and far between it seems, and the point is to be far
out ahead when they happen. I think I'd rather be 500% ahead with AOL and lose
half than ahead 20% with a diversified portfolio and lose half. Perhaps anouther
panic stop, a 20% trailing stop, could be included to help in this situation. If
its hit you could then be in the position to start anouther race.
</FONT></FONT></DIV>
<DIV><FONT face=Arial><FONT size=3> Hopefully not
all the stocks in your initial race are of the same breed and won't all be
affected by the market wind equally. Your high flying internet stock might be
replaced in this circumstance by a plumbing supply stock thats on the rise.
</FONT></FONT></DIV>
<DIV><FONT face=Arial size=3> Optimistically I'd
say stay fully invested, the stock market will recover, backed only by the naive
observation that it always has. Today's close above 10,000 makes all past market
crashes a temporary drawback. Of course thats not to
saythe"temporary drawback" of 1929-33 wouldn't have tested my faith.
</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV><STRONG><FONT face=Arial><FONT size=2>"Momentun and Relative Strength
seem to be the area your pointing to"</FONT></FONT></STRONG></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial>Momentum and relative strenght would describe, I think,
how the method worked in a past tense. I'm trying to use price action as my only
indicator. Trying to build a system that mindlessly reacts to price action, not
one that predicts it.</FONT></DIV>
<DIV> </DIV>
<DIV><STRONG><FONT face=Arial>"For it to work well one does not have to
watch it every day. Why not use weekly data"</FONT></STRONG></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial>I'm sure that's an excellent idea since weekly data
probably trends better and once a week would reduce the transaction costs. But
working with strongly trending stocks that can change as much as 20% in a week
you might be trying to jump to a horse thats already too far ahead. Besides the
hardest thing for me to do is to not "fiddle" with and check in on my
stocks on a daily basis. </FONT></DIV>
<DIV> </DIV>
<DIV><STRONG><FONT face=Arial>"Where are you getting your stock list from,
will they always be in business?"</FONT></STRONG></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial> Onstock does increase your vulnerability to the
problems of that one stock. Hopefully by sticking to the large cap. issues, that
are followed by many analysts, those problems would be reflected in the price
action long before they went out of business. I suppose it could happen but I
wouldn't expect a MSFT or IBM to open at zero on any one particular day. And
that one problem stock would probably have lost its lead anyway by the time it
crashed.</FONT></DIV>
<DIV><FONT face=Arial> The original set of stocks could
come from anywhere or fit any group of parameters. The ones I used in my
original letter were mostly from the motley fool website in the workshop area.
The Money 30 is a fixed group of stocks devised by the authors of money magazine
as a replacement for the smoke stack components of the dow 30. The money 30 can
be found and followed on money magazines website.</FONT></DIV>
<DIV><FONT face=Arial> The set of stocks I lean toward
are those mechanically picked by the Keystone approach found in the workshop
area of the motley fool website. The Keystone model is made up of large cap.
stocks that have performed best over the last 26 weeks and are on the
recommended list from value line. It is a dynamic set of stocks that, combined
with my method would allow a new stock,thats riseing quickly, to join my
original set of stocks. Inother words It allows a horse to join the race after
the race has started. Allowing the addition of these new stocks would keep the
set of followed stocks fresh. In a way it would set a trap, so to speak, that a
quickly riseing large cap. stock would have to pass through on its way to
takeing the lead.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial>One person was concerned with the lead stock getting too
far ahead of the 2nd best relative stop stock. I would love to have this problem
and honestly I haven't thought it out fully. Again maybe this is where a second
20% or so trailing stop could play a part, if hit it would restart the race.
</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial>It was suggested that IBD's relative strength numbers
could act as a proxy for the fastest horse. The way I see it, it would be just
anouther wall of interpretation between price action and results. However I'm
sure relative strength could play an important part in picking the original set
of stock, or it could be used to add new ones as the race moves through
time.</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV><FONT face=Arial> <FONT size=2>THANKS ALL FOR
YOUR COMMENTS MAYBE TOGETHER WE'LL FIND A SYSTEM WE CAN WORK
WITH</FONT></FONT></DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV><STRONG><FONT face=Arial> </FONT></STRONG></DIV>
<DIV> </DIV>
<DIV> </DIV></BODY></HTML>
</x-html>From ???@??? Mon Mar 29 17:07:07 1999
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Reply-To: dickwebb711@xxxxxxxxx
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From: Dick Webb <dickwebb711@xxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: Fake War(Offsubject)
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The pictures that are coming out are interesting.
The one like best is the tractor in front and 3 cars in
back of it. How many people do you know in a hurry to
leave somewere in a car ride behind a tractor going 10
MPH?. They need a new casting director for the
pictures.
The purpose of this war is to test new equipment in
real battle conditions that are different from the
Gulf. Like the Bomber and missiles that have problems
in bad weather. The U.S. is trying to get the Serbs to
attack our troops in neighboring countries so that we
have a reason to attack ...Reemember the fake Gulf of
Tonkin incident? Write your congressman ...no more
Vietnam's
dick
===
Big Lucky Dick
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