January 16, 2007

Long Term Investments Are Out of the Question

Of late, I've found my attention span in the stock market is decreasing rapidly. I used to be of the standard "buy and hold" mentality, picking great companies with potentially great stocks. But the seeming inevitability of the buy and hold strategy was that eventually, the stock would go down - sometimes in a big way, thanks to a profit miss or product issue.

The result is that my investment strategy has morphed, first from holding stocks for the better part of a year to instead a few months, down to a month or two at longest, and most recently, it's been unusual for me to even hold a specific stock for even a week. Instead, I've been looking for momentum plays, with specific actions that would temporarily boost a stock or stem a drop. This change in strategy has made it easier to turn money over and better regulate the potential spikes.

By turning into more of a day trader, per se, I don't fall emotionally for stocks, but instead look at them as faceless entities with ticker symbols, whether it's AAPL, GOOG, TIVO, or others. In fact, I even prey on companies that have fallen on hard times to benefit from their eventual rebound. Even a 3 percent jump in a day or two might be enough for me to sell. As a result, I've made more in stock profits in January already than I did in December, and more in December than I did in all of 2006 prior.

I don't know if this is a recent stroke of luck or the result of good planning. But for now, we'll keep trading off CES and MacWorld, and earnings hit or misses. It's working.

Listening to ''Walk Down (KVA Club Mix)'', by Kyau & Albert (Play Count: 2)

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