Because he axed for it:
I use the PEG 26 top 5 Stock pics (from the Motley Fool following the Peg26 Value Line system).
0) Buy stocks at the beginning of the month only.
1) Sell if stock drops to 0.80 of Bought Price
2) Sell if stock drops to 0.88 of Highest Close Price since it was Bought if the price is more than 13% higher than Bought Price (IE: do not sell at a loss)
3) Sell if Stock is held for more than 12 months
4) Do not buy more of a currently held stock
I am also looking into the SOS_A (Screen Of Screens) pics.
For the year, this is what I've gotten:
Symbol Bought $ Sold $ % YTD % From To
PKOH 1/02/05 27.0 01/28 22.0 0.81 0.81 - A -
CRS 1/02/05 56.5 - B
POT 1/02/05 80.0 - C
SWN 1/02/05 23.0 - D Split 2/1
CK 1/02/05 11.5 4/19 13.50 1.174 1.174 - E
HOV 02/01/05 53.5 A F
LSS 05/03/05 38.20 E
Stock Price On 07/01/05:
PEG26: % YTD%
HOV = 64.5 1.206 0.977
CRS = 52.0 0.920 0.920
POT = 96.0 1.120 1.120
SWN = 50.0 2.174 2.174
LSS = 45.5 1.191 1.398
Anyway, most years it makes between 30 and 75% with an average stock hold time of 3.8 months. I've backtested this 14 years and have never had a negative year (the worst was 13% I think).
It is an easy system, it is effective, it has 3 exits points, it works off of CLOSE price which eliminates daily noise, and it works every year (so far).
I set up my excel to automatically get daily stock prices and run a macro so, at the push of a button, I can update my prices and get flagged as to important changes. I just have to remember to do it!
If you are looking to make over 100%, good luck. I haven't met anyone that can do that consistantly with stocks.
Why, adam? If EVERYONE buys the same stocks I do when I do, their price will shoot up even more.
But, somehow I don't think the amount of $ OGers invest will even be a drop in the bucket :) Oh yeah, I forgot, we are all busy benching 600 lbs.
Well, I posted this and my real $ results on the Motley Fool a few times and was TOTALLY rebuffed by the mechanical traders as an idiot. So, werd don't always git 'round yo. Ya heard?
Anyway, the system just isn't complicated enough for that crowd, if you get my drift.
You don't have to limit you stock pics to PEG at all. The SOS_A (Screen of Screens) is doing well this year (no money, just on paper) and the RS-13 usually does well.
For fun, I backtested my buy/sell rules on some stocks for the past 5 years. HOV = up 400%. Follow my rules, and you'd be up 700%. DELL = down 13%. Follow my rules, you'd be up 209%. I had another stock but lost it's data sheet. Basically, it dropped to 1/3 of its original price. My system = -50% (not 67%) and bounced back to gain some over 5 years.
In a way, this is like slow day trading. Buy strong stocks, sell them when their price gets weak. The average stock hold time in 3.8 month though, not a few hours.
Oh, and I'm trying to apply moving daily averages to the sell point, but MDA tend to lag behind the current price by at least a week, so it's not working well.
Either subscribe to Value Line or www.fool.com and go the Mech. Investing forum where mTeubs posts it every week.
I had another thread on this... '07 SUCKED!! 25% return. '05 was 34% and I though that SUCKED but there you go. Basically, the latter part of '07 had a rollercoaster of a market and my system just cannot keep up with strong, fast market changes. Some options systems thrive on this, but I can't get them to work in 'ordinary' markets so I abandoned them years ago (lost a bit of scratch, too).
I am still working on a new set of rules or some addendums. So, maybe the info I picked up from last year will help me in the long run. We'll see. Timing the market seems impossible, btw. I read an article published in 1959 by a guy who'd been in the market in the '29 crash. The article said that after 32 years of trying, he could not reliably predict the market short term (IE: market timing). Anyway, food for thought. I'll keep you guys updated if you'd like.
Thanks for sharing Stronghold. I'll have to take a closer look at this when I