2) 8% is an example from William O'Neil for large cap domestic stocks. That's his number; it's up to the investor to define their own plan. Percentage moves in lower dollar stocks are greater than higher dollar stocks. (It's easier to go from 1 to 2 than 20 to 40).
3) Calls in Technical Analysis rarely cause the stock to drop.
4) It's all part of your plan. Your original example of getting out when a stock drops a dollar is not a good one. If a stock you bought at 40 goes to 30, would you get out, or add more? What about 20? 5? You need to have a plan. That was the whole point.
5) Great question. If the stock is up 100% because the company says their worth more, should you sell? My example ($BKX) is a great example because the fundamental valuation that the banks gave us for the past 2-3 years were misleading.
6) It is a viable strategy if it produces a positive expectancy. That being said, most people can't get an edge in trading. However, you do need to have contingencies when investing.
7) That's the point I was trying to make! It's not buy and hold forever... but what's your timeline, or your price point?
8) Stocks and ETF's have different risk characteristics.
When people invest (and at this point in our discussion, I'm talking about specific stocks or focused ETFs) they are not always right. What do you do when you aren't right? Do you blindly hold on to the stock, waiting for that bounce? If you don't have a set risk management plan, then you will panic.
Similarly, what if you are very right and one of your picks doubles. Are you willing to risk all of your gains in the future or are you going to protect profits?
The whole point was to show how risk management and capital preservation is a necessity when investing (or any business venture). To deny that is a serious mistake.
2) 8% is an example from William O'Neil for large cap domestic stocks. That's his number; it's up to the investor to define their own plan. Percentage moves in lower dollar stocks are greater than higher dollar stocks. (It's easier to go from 1 to 2 than 20 to 40).
3) Calls in Technical Analysis rarely cause the stock to drop.
4) It's all part of your plan. Your original example of getting out when a stock drops a dollar is not a good one. If a stock you bought at 40 goes to 30, would you get out, or add more? What about 20? 5? You need to have a plan. That was the whole point.
5) Great question. If the stock is up 100% because the company says their worth more, should you sell? My example ($BKX) is a great example because the fundamental valuation that the banks gave us for the past 2-3 years were misleading.
6) It is a viable strategy if it produces a positive expectancy. That being said, most people can't get an edge in trading. However, you do need to have contingencies when investing.
7) That's the point I was trying to make! It's not buy and hold forever... but what's your timeline, or your price point?
8) Stocks and ETF's have different risk characteristics.
When people invest (and at this point in our discussion, I'm talking about specific stocks or focused ETFs) they are not always right. What do you do when you aren't right? Do you blindly hold on to the stock, waiting for that bounce? If you don't have a set risk management plan, then you will panic.
Similarly, what if you are very right and one of your picks doubles. Are you willing to risk all of your gains in the future or are you going to protect profits?
The whole point was to show how risk management and capital preservation is a necessity when investing (or any business venture). To deny that is a serious mistake.