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Stocks
tend to provide superior returns over time compared to
most securities. In addition, small caps tend to
outperform mid and large caps over the longer-term. |
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Don't get married to a stock. If the original
reasons for owning it have changed for the worse, it's
far better to take a small loss than to hope that things
will improve. |
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Don't
be greedy. Be disciplined in your exit criteria,
and 20-20 hindsight won't become an issue. It's
much easier to buy a stock than to sell it, and each
individual has to decide what constitutes a satisfactory
exit. |
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Buy
the rumor, sell the news. This tenet applies to our
swing trading or special situation positions. Smart
traders don't
wait for anticipated news to be released. We take our
profits, and wait for the general public to deal with
the outcome of the news. There are times when
holding reaps additional profits, but the wise
money is on selling before the announcement. Ample investing
opportunities will come up after the news is digested. |
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Either hold cash or "live" stocks...dead money does
nothing for your returns unless your time horizon spans
a period where a dead stock has strong catalysts. |
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Never
chase a stock. Our selections provide suitable entry
points. If you don't get a stock near the profiled price and it
starts to rise, focus on some other
opportunity instead of chasing. |
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There
may be periods where you may want to sit out of the market
- especially when you can't figure it out. |
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Time
frames will be provided with each profile, but most
selections are targeted for 6-12 months. Since earnings
potential constitutes a substantial weighting in our
selection criteria, we want to see a couple earnings
reports as measuring sticks against expected progress. |
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Risk
is an important consideration when evaluating a
selection, but by itself risk tells only part of the
story. We'd like to introduce a familiar term
called "risk/reward", but as-stated that
ratio is somewhat counter-intuitive. In most of
our reports and trading alerts we will make reference to
a related and highly useful measure that conveys
how powerful we believe the selection to be. But
even this insightful criterion is just one of several
that we take into consideration. |
