Whats Your Strategy In This Market Condition?

Discussion in 'Stock Market Forum' started by Stacked, Feb 17, 2014.

  1. Stacked

    Stacked Active Member

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    I'm almost all cash at the moment because of the current market condition. Im staying away from big bluechip stocks and kind of hunting out value buys in smaller companies. I would like to see the market dip lower for a while, I feel prices are inflated.

    Lets share strategies! What are you doing in this current market condition?
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Lots of cash, gold, crude, some nat gas, a little silver. Long a couple dozen companies with strong revenue growth and other things going for them (quite a bit in energy / alt energy, biotech, and tech). Short on S&P as a hedge. Puts on a few dogs like JCP and high flying names that appear way overpriced. Usually a couple of longer range call / put spreads here and there on biotechs with interesting drug pipelines.

    I've been pretty bearish since late 2012. I wish I hadn't gone to such a heavy cash position right after the election and held on to most of the long stock positions I'd had going into Nov '12 - I would have made far more $ in '13.

    I left my retirement accounts pretty much the same as they've been for a long time - mostly invested in a number of the better managed global allocation and bottom-up value type mutual funds. I did largely get away from funds with heavy small and mid cap exposure (went to cash on that portion of the portfolio), but I left most of it as is and continued to dollar cost average with the other stuff. My retirement account did better last year than my main account for a change.
     
  3. crimsonghost747

    crimsonghost747 Senior Investor

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    I too feel that the prices are inflated at the moment and that we should see a dip. Then again, I've been saying the same since November.
    I've always been going with the buy & hold unless something really dramatic happens strategy so I'll stick to that one now too. Though I am keeping quite a large amount of cash instead of using it to buy new shares, simply because I do feel like sometime during the summer I'll be able to get a lot more stocks with that cash.

    That doesn't mean that I've completely stopped buying, but lately I've only bought small amounts and companies which are pretty much guaranteed to bring a profit in any economical situation. (utility companies with a monopoly etc)
     
  4. Guardian

    Guardian Member

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    The past two years or so I have been focusing on the cheaper, more stable dividend stocks. The stock price usually stays the same, so there isn't much room for growth there but the dividend is nice and allows me to reinvest it. I stick with the cheaper ones so there is less fluctuation in the price. It is much easier to recover from a 2% loss on a $10 stock vice a 2% loss on a $50 stock.
     
  5. JR Ewing

    JR Ewing Super Moderator Staff Member

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    Are you buying the same amount of shares with each stock? As long as the amount of $ you put into each is the same, the % fluctuation in share price will equate to the same dollar amount gain or loss. But if you buy 100 shares of everything, then the dollar amounts will obviously differ on a $10 stock vs a $50 dollar stock, because you are putting a much different dollar amount into each stock.
     
  6. crimsonghost747

    crimsonghost747 Senior Investor

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    When talking about cheap and expensive stocks, I'd much rather look at P/E and P/B than the actual price of the stock. In fact, I think the actual price of the stock is the least important thing for long term investing... doesn't really matter if it costs $100000 if it is able to bring in long term profits at a reasonable %. If you are talking about day trading then obviously the price matters since you're going to be letting go of it by the end of the day.
     
  7. Thejamal

    Thejamal Guest

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    When do you decide to change position and start buying again? When is the "dip" enough? Be curious to hear your thoughts when you feel it's smart to start buying again when you think prices are inflated.
     
  8. crimsonghost747

    crimsonghost747 Senior Investor

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    Well as I said I never completely stop buying, I have made a couple of buys during the recent months. I am unable to accurately predict when the dip has reached the bottom, much less where that bottom line will be for most companies, but I do feel that at the moment the prices have a lot of air in them and I would expect there to be a larger drop in the next 6 months. Then again, as I mentioned, I also said that 4 months ago.

    When the prices start falling that's when I start considering buying more. I have some cash, plan on saving some more and I'm not afraid to use leverage if the prices go real low. This way I can start buying at the early phase of the dip and continue with increased stakes the lower we go. This is simply to profit from the lower prices no matter where the dip stops.
     
  9. Thejamal

    Thejamal Guest

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    ah so it's a progressive system? The more prices fall, the more you buy sort of deal. Makes sense.

    Have you found it to be profitable over long-term?
     
  10. crimsonghost747

    crimsonghost747 Senior Investor

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    Yes it's progressive. I buy all the time but the amount of money I use depends on my idea of the current prices.
    I can't really speak for the long-term since I've only been at this for a couple of years, but so far it has worked out well for me. The market will have it's ups and downs, but seeing as I don't really plan on selling in the next 10 years the low points just provide me with excellent opportunities to get my hands on quality companies for a good price.
     

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