Sam:
I like to look for,(just like your subject board says strong industry groups)when conditions change. (Companies hitting new highs)Example- Defense companies when the event happened, and gold stocks. We are most likely in a recession, so I like groups that have proven over time to do well in a recession. (food & basic essentials). I'm also a volume watcher. I like to see when money flows into a stock on volume, and out. Block trades on up tick or down ticks. If your following them, you know what the average volume tends to be.
I also as you do, look at economic data. Retail Sales, Housing starts, durable goods, employment data, consumer price index. The index of leading economic indicators. If I remember right, 4 declines in a row, and it's an official recession. It's a lagging indicator, so I think economists don't commit themselves until it happens. Long ago, I used to look at the money supply M1 & M2, but now look at money flowing into mutual funds or out.
I haven't been college educated, Actually, I learned a trade (I'm a pressman). The Library was my place of study, looking over pieces of company reports,business news & data in print or person. I've been investing for 24 years now (started at 17) (now 41). You tend to develop some street smarts over this time period. I'm never afraid to go against the grain. This being analysts. I like to see what they are recommending & downgrading. As for specific stocks, I tend to pick each for different reasons. It might be earnings growth, takeover speculation, balance sheet, market share leadership,depressed market valuation,ect,ect.
I've learned, to be able to adjust to market conditions, you can't be afraid to take a profit instead of worrying how much you could have made. I like to get a profit locked up early on, so I have more leverage down the road if things get bad. I should also tell you I stay nearly 100% invested at all times. This makes me pay attention to what's going on. It leaves me at the mercy of the market, but also has me positioned when it's going up. This is why I have a diverse portfolio. A little bit of everything, but the $ allocation to specific stocks or peer groups is the most important for risk management. I also have long positions,and trading positions. Like my subject board says "I like to hear what everybody has to say, but I do what I think is right Myself" It's worked for me anyway.
I don't know if this give you anything new to look at, but I know the markets have changed so I need to be open to change to keep up, with the challenge.
"GOOD INVESTING TO YOU"
Rick |
