To All: Following is an excerpt from a newsletter of a stock group I belong to.
This time of year is always so bad, happens every year, with damn few
exceptions. Much of it has to do with adjustments that Mutual Funds
make of their portfolio's compounded this year with the bad taste left
from the raping investors got this spring. Don't ask me the why of
Mutual Fund adjustments, I just don't understand it all. Someone
smarter will have to explain it to you.
I think I mentioned a buddy of mine that invests only four or five
months a year, and makes big bucks, maybe we should all do that.
Anyway, for lack of something else to discuss, lets look at how he
does it, at least the way I understand he does it.
In September, October, and sometimes early November, he does all his
buying. Buys around $200,000 worth of stocks. He holds the stocks
until the end of January, February, latest early March. Then sells
everything and goes to all cash, sometimes he will put most of the
money in a 6 month CD, from March to August. Then when
September/October/early November comes around he will start to buy
again. Does this year after year. He said he never invests more
than the $200,000, if he has a large overage left from taxes, and
instead of spending it goes into property, long term CD's, REIT's paying good
interest, etc.
Does he make money, yes, more than I do, that is why I keep thinking
about it, however for a stock market 'junkie' like me that would be
boring. Earl claims he has made at least $50,000 the worst year,
and this last year made almost $300,000. He sold when the rest of us
were caught up in the hype of stocks going higher and higher. Takes
guts to follow his system, but it works.
Stocks with a tradition of dropping in the fall and raising in the January/February
are prime contenders. Also stocks down by some temporary situation,
or just down for no reason at all.
Of course, Earl really has to have a set of (excuse me ladies for the
expression) "Brass Balls" as he is really doing the complete reverse
of what everyone else is doing. While most are sitting, scared to
death, watching their stocks go down and down. Earl is sitting there
with cash, and having only one decision to make, "When is the stock ,
in his opinion, at or near it's low so he can buy." He says that if
a stock has dropped constantly, and then goes up a bit, or holds for
few days, that is usually the time to buy. The stock may go down
further, but usually not to far. He loves stocks with a patented
technology, making money, or near to it. He is probably one of the
purest disciples of the "Buy low, Sell high" theory I know.
Fearless, ---buying when folks are hiding and scared to death, and
selling when everyone is watching the market go up. Smart, very
smart indeed!
He also says investing only 4 or 5 months out of the year is LESS
'stressful' he can relax all late spring and summer, not worry about
the market. Hell, Earl is, HOPING, the market goes down in September,
the more the merrier for him.
Cheers
