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#1
10-18-2006, 03:19 AM
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Active Investing and 33% return, lucky or correct strategy?
September 2005 Start: $3k
October 1st 2006, End: $4k My Strategy: Screened for micro cap stocks with earnings growth and some other factors. Had 2 Big Hits: PUDC.OB and STKL Some Big Misses: SLI, PTCH Some short term risky plays like IDWD (haha at that one) I owned 4-5 Stocks at a time. This year, deposited $500 more dollars to make it $4.5k, currently up to ~$4.8k. I did a lot of research on the companies before I invested, but still assumed a lot of risk. Did I just get lucky or do good? Im defently feeling holding a few of my current companies long term is the way to go, but i have the worry that maybe I just benefitted from a bull market and that I should be more cautious and diversify more? Any thoughts are appreciated. Thanks. 
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#3
10-18-2006, 12:48 PM
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Re: Active Investing and 33% return, lucky or correct strategy?
The real question is how to handle this now that you picked a couple nice ones. Stay in for a while? Sell? Hedge out a bit? Set a trailing stop?
People tend to work much harder at avoiding losses than maximizing gains. Don't fall into the trap. Stay on top of it and maximize your gains here.
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#6
10-18-2006, 04:40 PM
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Re: Active Investing and 33% return, lucky or correct strategy?
Fortunately, due to my risk tolerance, I haven't
worried about losses, which has allowed me to stay in and see a gains. Unfortunately, I can't put trailing stops on OTCBB stocks, so 2 of my stocks have no protection.
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#8
10-18-2006, 09:35 PM
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Re: Active Investing and 33% return, lucky or correct strategy?
[ QUOTE ]
Unfortunately, I can't put trailing stops on OTCBB stocks, so 2 of my stocks have no protection. [/ QUOTE ] This statement is a sign that your results have been due to luck, not skill. A willingness to sell your investments at a lower price than you paid is a sign you don't understand their true intrinsic value.
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#9
10-19-2006, 03:09 AM
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Re: Active Investing and 33% return, lucky or correct strategy?
[ QUOTE ]
I did a lot of research on the companies before I invested, but still assumed a lot of risk. [/ QUOTE ] What kind of research? Did you just look them up on Yahoo and believe the numbers there? Did you just read the press releases put out by the companies and believe them? You know that Bulletin Board stocks are not required to submit audited financials like NASDAQ and NYSE stocks do, right? They might be telling the truth or they might be lying. Do you search the backgrounds of the officers and board of directors? Do you search trade journals for mention of their products? Do you consult experts in the field to verify that their claims seem plausible? Do you maybe even go so far as to visit the company and make sure it's for real? These are all things we do before we play a BB and we usually end up shorting it. Most BB companies will never earn a dime and a lot of them are outright scams. If you've been playing big movers and been getting out with good profits, then I would say a part of your results are luck. Usually when these things fall, they go quickly. If you are quick and not too greedy, it can be a profitable strategy. Just don't kid yourself into believing you're "investing" in the next Microsoft. It might be eye-opening to pull up the charts of the stocks you traded a year ago and see what they've done since.
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#10
10-19-2006, 04:29 AM
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Re: Active Investing and 33% return, lucky or correct strategy?
Thanks for the useless and attacking posts.
Im sorry to have misled DesertCat, I haven't, won't, and have never put trailing stops on any of my stocks. The assumption of my absolute ignorance is nice, oh yes I think Im going to find the next Microsoft on the Bulletin Board stocks, hahahaha thats a good one. I researched my stocks thoroughly, especially researched on names of people running the companies to find out what I could. I came up with good and bad, sometimes I went with the bad anyways, such as with CDGT. But each stock that I invested in took at least 10 real hours of research spread out over a 1-4 weeks on average. I think perhaps what sets me apart from a lot of you guys is that I don't trade solely on value, but trade also on Momentum/Swings, ala Trend Rider, Ill usually have 1 short term trend play, and 4 stocks I think are undervalued.
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Hybrid Mode
