Pitbull Investor
Q: How right you are! My Pitbull stocks were stopping out constantly on either relative strength or price (sometimes both at the same time). I had a few that went up, but not nearly enough to cover the losers...
A:
Well my experience matches yours and Bill's. I've been keeping a paper
Pitbull portfolio for about 4 months now and the results are extremely
dismal. Very few Pitbull selections have gone up by any appreciable
amount, and those that have are not nearly enough to compensate for the
many that have been stopped out for losses (either by RS o
As I've indicated before, I will be posting my Pitbull 6 month study in
about 1 month. I've been keeping in touch with Bill who I think plans
to do the same.
Yes, with such blatant hype, what do you expect?
...I am a trained mathematician and Yale graduate who has carefully
followed the stock market, observed investors, read forecasts by market
experts, etc for over 30 years. During this time I have never found
anybody who can consistently predict prices accurately, which stands to
reason since such a person would eventually own a good part of the whole
country. The closest anyone has come seems to be Warren Buffett who thru
Berkshire-Hathaway has bought and held stock in a few companies with
whose business and management he was intimate; he has also been somewhat
lucky as his investment career coincides with a long unparalleled bull
market. Whether such an environment will continue, neither I nor he nor
anyone knows, but if it does that is clearly one way to profit.
Based upon my observations and the psychology of investors, I have
within the last few years developed an unusual method of trading stocks
which because of formerly high commissions would not have been
profitable in the past. It's based on the elementary principle of not
buying a stock UNTIL it goes up and not selling UNTIL it falls. 99.9% of
investors are psychologically unfit to follow that simple axiom, the
temptation to "buy low" and "sell high" is too great - they think they
can "predict" what is "low" and what is "high" and that in time leads to
their downfall. They cannot admit error to themselves, but take error as
a personal intrusion upon their egos. That in a nutshell is the secret
of trading, which as I say can be freely revealed because practically
nobody is psychologically equipped to follow it.
Optimally I have found that this method is somewhat analagous to acting
like an anesthesioligist. The latter after administering appropriate
drugs does nothing during the course of an operation other than to
observe his patient, BUT if anything goes wrong he must immediately take
corrective action; and so must the trader. He must constantly be aware
of price movement.
At my www site I freely print all trades resulting from this (dully
mechanical) method as they occur. Attentive traders can duplicate them
later in the day if they desire, often at better prices. One catch is
that 14 fairly expensive stocks are always being held, either long or
short, and I have no way whatsoever of knowing which trades will be
profitable, but the basket of stocks is doing just fine; so for your own
good you must diversify among the 14 as much as possible, a rather
costly proposition. Another catch is that those stocks which can be
obtained at a better price than the printed executions are, just ever so
slightly, more likely to be losers than those which can't. If you want
to know at what point I'm ABOUT to make a trade, and therefore gain that
statistical advantage, you'll have to notify me. (For this I charge 10%
of your actual profits.) If you like the results and cannot for some
reason actually duplicate them, I'm considering forming a partnership
whereby funds will be pooled to trade the whole basket of stocks.