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Trendliner

04/24/17 8:10 AM

#3234 RE: growtheport #3233

THANKS GROWTHEPORT

A problem that's common to both fundamentalists and technicians who use their judgment / intuition to make sense of all the facts they do look at is combining into a conclusion. I do work by judgment so I try to keep it simple.

I've read that we humans can successfully combine up to 3 factors/indicators/variables, whatever you want to call them. That's one thing that appeals to me about the Altman Z-Score. It takes five different ratios and bam out comes a bankruptcy risk assessment.

On the technicals I keep it pretty simple. I draw a trendline on the chart and then look at price momentum and then how momentum is changing. 3 things. I do that on two kinds of charts. The price and the price relative strength vs the market or industry group. So I assess the price chart with 3 things and then the price relative strength chart. If they both say the same thing it's a go.

I got shaken out of VRX in late summer of 2014 but then got back in October of that year. Then I hung on again till August of 2015 when the acceleration (change in momentum) went way negative. The weird thing is in my gut I felt like I was going to miss the boat for another big rise. That turned out not to happen but I would have made side bet I was going to be sorry I sold. My nagging thought was how could a guy as rich and smart as Ackman be wrong. He had been banging out 20%+ returns for his fund since 2004 and VRX was one of his biggest bets. But in the end I stuck with the chart cause that's all I know how to do. Like I said....very simple.

Thanks for sharing.

Trendliner