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Title: Did SSP change its strategy? Post by: jeff on July 30, 2007, 10:29:17 PM Dear Sir;
it surprised me a little bit that SSP picked SMX for V3 and CUQ for V4. CUP dropped from $14.95 to $11.70 and SMX dropped from $9.4 to $5.4, an over 40% drop. In my opinion the momentum is gone and may not considered as momentum play any more. v4 and v3 have a better performance than the "price momentum weekly" porfolio. i guess one of the reasons may be like this. when a stock's momentum is strong, it catches SSP's attention and SSP pickes it for the weekly portfolio. but since the stock has risen so much ready, it MAY consolidates/corrects right after the weekly's pick. after 2,3weeks, the stock's consolidation is over, and the V3,V4 picked it to catch the next wave up. I noticed that those consolidations after the "weekly" pick are NOT deep, not like what SMX just had. so i did not buy CUQ and SMX this time, after such deep drops, stocks usually won't reach the old highs any time soon. they take some more time to consolidate and build the base for next run. I wonder if SSP changed the strategy or is trying something new? Title: Re: Did SSP change its strategy? Post by: Super Stock Picker on July 31, 2007, 10:32:45 PM Hello jeff,
No, we haven't changed anything in the way we pick our stocks. If we would do so in an existing portfolio, it would be a slight change and, of course, we would tell you! For instance, we are thinking at adding a volume limit on the stocks we select for the Price Momentum portfolios. Tests show very little impact and it would be a nice safe guard to add. More specifically about your question, do not forget that those stocks have been elected into the v3 and v4, because they have been bought at the first place in the Price Momentum Weekly portfolio, and are not sold yet. That being said, they would not be a buy anymore. But, as long as they are not sold, they are making their way in our portfolios. Then, in our portfolios, not being a new buy, does not imply to be a sell. Our criteria are not symmetrical. Of course, your remark makes sense and if we can deduce that after a too deep consolidation phase, there is no chance of posting a positive return, then we could add this rule to sell (a bit) faster. If I remember figures from another discussion, we have already experienced a pullback of #10/15% after the buy of a stock to finally show a huge profit. And about your other point, do not forget that we have also experienced stocks being bought in the Price Momentum Weekly and that have not consolidated before a loooong time. I would say, it is the case of TIM.TO that we currently hold. |