I wouldn't go as far as to say "peaks." I don't believe you can time the market perfectly. I sell if the momentum turns negative just like i buy when the momentum is bullish. A quality stock never prices in all its gains in one day.
my Apple trade (can be verified on my site) was a somewhat good example. I rode the momentum up and when it started to fizzle and drop, i sold before it tanked now giving myself the opportunity to buy back even lower than my initial entry point. Overall, I could have held, waited 6 months and sold at 250 for a nice profit. Instead, I sold when it was starting to fizzle now allowing myself the ability to use my capital elsewhere to make me money in the meantime while I wait till tech/apple is loved again to which I can ride it up to 250 and higher.
Just like I've been telling everyone in my articles that the momentum is negative and we were going to encounter this Bear market that we are in today (you can verify my prediction in my articles on my website)...I go with the momentum rather than fight it. I do my best to take my emotions out of the market and I don't have ANY loyalty to any stock, EVER. The money a stock made me last year doesn't history will repeat itself this year.
When a stock starts to fizzle, I research and analyze and TRY to determine whether its just a small breather and I should buy before the next leg up OR if it's going to drop further where I need to take out "an insurance policy" and sell some to buy back at a lower price....therefore protecting capital and being able to make even more gains because i didn't lose much, if any, to begin with.
If my insurance policy is wrong...who says I can't buy back in at a higher price assuming my catalyst is still there? If a stock is going to make huge gains...its not going to make them all in one day else it's just a trade and not a long term stock. so maybe i missed 40% out of a total of 300%....thats fine with me because I'm more likely to minimize my losses when that insurance policy pays off.
Yes, I enjoy watching Cramer for entertainment reasons mainly as his show really isn't too helpful for a serious investor. His books are another story...I've read them all and they are filled with good information. However, I feel his strategy is best for a less active investor OR a 50 something year old investor trying to make some gains but nothing extraordinary before retirement. My strategy is a hybrid of various respected analysts of mine and he's only a small portion of it. GO CBAI! GL out there.
Mike
