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   Strategies & Market TrendsStrong Industry Groups - Strong Stocks


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To: Sam Raven who wrote (715)11/8/2001 12:16:26 AM
From: richardred
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It seems to be that way. Some short sellers are getting a little nervous. The market is supposed to be going down because we are in a so called recession, and in a war to boot. Earnings aren't great, sales are down or stagnant for the most part, and defense stock are retreating some also. When numbers are down, but stocks in general are moving higher. Its comes down to some plain old street smarts. That's why I have the most respect for investors who can make money in a down market. IMO- Its all about adjusting to market conditions.

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To: richardred who wrote (718)11/8/2001 8:29:04 PM
From: Sam Raven
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Richard,

>>IMO- Its all about adjusting to market conditions.<<

True.....what tools do you find most valuable to gauge when and where conditions have changed?

I access economic data, and go by the balance of buyers and sellers of my screenings, but I'm always open to new tools you might have?

Sam

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To: Sam Raven who wrote (717)11/8/2001 10:43:14 PM
From: Sam Raven
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Review of Thursday...

One of those occasions that every stock alerts but few remained green to the close,(remember risk had increased to moderate).

The oils, PDS and NE survived BOBJ and STE in medical equipment also held on, and we'll be watching STE again tomorrow. For ourselves, I traded and stopped out in ARXX.

Sam

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To: Sam Raven who started this subject11/9/2001 12:28:06 AM
From: Sam Raven
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I reviewed the minutes from the October Federal Open Market Committee meeting to look for the differences in my view of the economy that would account for the Federal Reserves more aggressive reduction in interest rates than I expected.

After reading the minutes it appeared my view of the economy was very much in line with what the Federal Reserve was seeing. The difference is that the Federal Reserve Board see deeper cuts in interest rates having a larger short term effect than I believe. Also, I think it is a little short sighted not looking at how much and how fast they are going to have to take back the goodies when the economy turns up. Here is what was said to address this issue: "Monetary policy is a flexible instrument and, with inflation expectations likely to remain relatively benign, policy could be reversed in a timely manner later should stimulative policy measures and the inherent resiliency of the economy begin to foster an unsustainable pace of economic expansion."

I have to assume that, when in coming months, they say they are raising rates to be more inline with economic growth and inflation, the market will be understanding that we were in an unusual situation making interest rates spike down....an unusual amount.

Lastly, when in October they argue that they are decreasing rates more because; "the decline in stock market prices and the widening of risk spreads had damped the stimulative financial effects of the Committee's earlier easing actions" might apply to last October, but not this time around, when the stock market was higher than it was prior to September 11th. Anyway, I will continue to learn.... and provide them my views <g>.

For those interested in reading the Federal Open Market Committee meeting minutes, click on the following link: federalreserve.gov

Sam
savvy-trader.com

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To: Sam Raven who started this subject11/9/2001 1:02:00 AM
From: Sam Raven
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Thursday had mixed market internals and continued weakening in the screened stock ratio at 8.1 to 5.3 favoring buying. Again, the direction of the ratio is important as an oscillator. Risk remains moderate.

A few more companies off our Growth Stock Journal showed up on the screening, and are added to the watchlist today. DLX is one that made a new 52 week high today.

There is still strength in biotechs, medical equipment, select retail and more and more energy stocks.

Longs to watch: APC, CPRT, DUX, NBIX, NOI, PEP, SRNA, STE and TECD.

Good Trading!!

Sam
savvy-trader.com

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To: Sam Raven who wrote (719)11/9/2001 1:36:42 AM
From: richardred
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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

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To: Sam Raven who wrote (720)11/9/2001 1:46:01 AM
From: richardred
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I've looked at STE. I used to own American Sterilizer, before they bought it out quite some time ago. IMO- A safer way to kill germs than Surbeam.

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To: richardred who wrote (723)11/9/2001 10:28:33 PM
From: Sam Raven
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If I could carry back in time what I know now, and have another try at living my life, what would I do differently based on this information?

This has been one of my pet projects, keeping a list of things that folks have told me, and that I have take note of that would we could pass to a younger generation that still have time to learn from and profit from mistakes. One of this days I'm going to publish the list....

And what you wrote was like a window into someone's world of experience.....Thanks for taking the time to write in detail, you offer hope to younger people to get into the market in a time that they will look back at as one of the greatest opportunities to invest in their lifetime.

Thanks Richard,

Sam

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To: Sam Raven who wrote (722)11/9/2001 10:41:19 PM
From: Sam Raven
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The key word I've mentioned the last few days has been oil. The two in the watchlist for today, APC an NOI had another good day. We traded XTO, both XTO and APC are two out of the 20 strong stocks we follow in our weekly newsletter.

Otherwise today, DUK alerted but that was about it from today's SI list. PEP was up but never alerted. STE is interesting if it can hold support at 23.

Sam
savvy-trader.com

Sam

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To: Sam Raven who wrote (725)11/10/2001 2:10:36 AM
From: richardred
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Your welcome Sam: To me it's really satisfying to know you did your homework, and it paid off. I try and encourage other new investors to do the same when I can. Anybody can throw a dart, but I'll stick with knowing my target before I throw. The word Success has different interpretations by everyone. I tend not to think just monetary, but family life and seeing someone else you've know profit from something they learned from you. I do like to hear what everybody has to say, but I'm not one to suck it up, and offer nothing in return.

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