SSP during a drawdown

[garilou]

DCA,
Just a hint if you want to buy Gold (admittedly on paper):
iShares COMEX Gold Trust (IGT:TSX)

Recognia technical recommendation:
Short term bullish since oct.06,
Long term bullish today:
(Not cheap: 103.21).
Price objective: 120,00 $ - 124,00 $

stockcharts.com is still more optimistic:
Price objective:
Short term: 128$
Long term: 155$

Louise

[bryanmcn]

Here's a math riddle for all who still hold the V1 portfolio.

Year to date the V1 is down 67%. How much will it have to gain (in percent) to break even by Jan 1, 2009?

[garilou]

Brian,
Are you posting this as a joke or are you serious?

This is not a "math riddle"
In order to calculate this, you would need a constant.
One would have to assume that all stocks will stay in the portfolio till Jan 1, 2009
V1 is one or the portfolios where stocks held change most!

You should be happy, the 2 portfolios that you "follow" are then only ones in the green!

Back to the topic SSP during a drawdown :
Maybe the lesson could be:
During a drawdown, adopt Price Momentum Weekly and Ultimate Price Momentum v1!


Louise

[bryanmcn]

Not a joke. Its a simple calculation. Again ...

What percentage does the V1 have to gain to reverse its losses (be at break even) by Jan 1?

The answer reveals my point.

Hint: Start with $100 on Jan 1, 2008.

[Alena]

My guess is 303%. Is it correct?

Regards,
Alena

[bryanmcn]

Off a bit...

If you had $100 on Jan 1st and lost 67% you would have $33 remaining.

To get back to $100 you would need to gain $67  = 67/33 = 203%!!!

The V1 has to triple its value by Jan 1 just to reach a year over year break even!

My point is that the SSP portfolios draw down way too much to allow the average human trader to recover. Most of us jump on board when the portfolio is too high but when the historical stats are looking great. Then the portfolio corrects and we bail at the bottom. If we are to buy low and sell high we must buy now! A time when the historical stats look awful!!

I'm cautiously buying (is it the low?) In WN and FHH today

[Alena]

Sorry, I did not pay proper attention to the quiz!

I was thinking V1 lost 67% but it is down to 67%, so yes, you are right, it should gain 203% to be break even. Thank you for the quiz!

Regards,
Alena

[garilou]

Alena, I think Bryan really meant V1 lost 67%. (has regained somewhat since)
And since he gave its answer... thanks Bryan.

Yes, SSP certainly has a problem during a bear market.

If you look at the "Since inception" stats
http://www.superstockpicker.com/portfolios.php?column=all_time&sort=DESC#perf_table

Almost all portfolios made better then the TSX but 2:
Earnings Estimate Upgrades Weekly
Earnings Estimate Upgrades Monthly

(Not surprised any more: these data do not seem to be able to change a stock's momentum)


If you just look at the Year to date page:
http://www.superstockpicker.com/portfolios.php?column=ytd&sort=DESC#perf_table

ALL portfolios did worst then the TSX.

But I think most of us got out before, and you Bryan, you did if I remember well.

As for WN, not sure if it's the low, but seems it will break out pretty soon.

And FFH is way up from it's lows.


So if you want to buy low, you must expect some losses at first.
"Buy low sell high" is not an absolute truth! It's a dream!
Buy not to high, sell not too low...

But since WN made it up to UPMv2, it might just depend on the whole of the market.

Some good stocks that should be heading up are constantly repressed by the market starting the day sometimes bullish, and finishing down.
I got chilly today as IBM (on which I'm short) started well with a small loss at 89.75, and inside a few minutes, jumped at 95.91, which would have been my highest loss on a short. I was paralysed: good paralysis: it ended by finishing with a small loss again (-.74)

Now sorry for my personal history: what I want to say, is that investors (or traders what ever one wants to call them) do not trust their stocks anymore and just follow the trend of the whole market, with few exceptions.


I am slowly getting back in, I mean long, but prudently too, as my shorts are not all covered yet.
I checked one stock that kept it's upward momentum for many days in a row, not too influenced by the DOW ups and downs.
That's the one I picked for my first long position of the season.

And I do not think we are out of the bear market: after the financial crisis, comes the economic crisis!
Then it will be more sector by sector that we'll have to look for opportunities to go long or short.

Louise

PS: One good thing we must recognize to SSP: they do not hide! A compared to so many sites who just show you their 1000% profits on one or 2 stocks.
This is one of the main things that make me trust SSP (which doesn't mean follow blindly), but trust their team.

[bryanmcn]

I'm starting a new topic - "The Future?"