Comments on: My Stock Trading Rules?

By: cordefr

cordefr — Sat, 10 Apr 2010 22:18:59 +0000

According to "What works on Wall Street" by James O’Shaughnessy the best performing stocks are small/middle cap growth stocks that show strength and are not too expensive yet. You select approximately the opposite by asking for big caps, high dividends and no debt.
Too give an example: would you prefer to buy Microsoft *now* when they are big and paying dividends or 20 years ago when they where small and growing fast?

Did you test your rules? You should.
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By: gatewaycustomer42

gatewaycustomer42 — Sat, 10 Apr 2010 21:59:59 +0000

I think at best it only tackles half the problem of investing. Your list takes care of the FUNDAMENTALS of a stock, but nothing about the TECHNICALS (price movement).

You could buy a stock that scored all "+3′s" but if institutions and hedge funds have decided to sell out your sector (such as oil the past month) then you’re still screwed. You need to start learning technical analysis and find when a sector is in an "oversold" position and catch it right before it is about to cycle in as being "hot" again.

But you at least have a good system to filter out stocks that are fundamentally crap.
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By: spongeworthy_us

spongeworthy_us — Sat, 10 Apr 2010 21:12:59 +0000

The only thing I’m not so crazy about is your market cap rules. Your system gives the same weight to a large-cap as it does to one with PE<5 . I would give much greater weight to PE<5 than market cap>$50B .
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My own experience.

By: EAA Duro

EAA Duro — Sat, 10 Apr 2010 20:58:59 +0000

KISS (Keep it simple stupid). That is way too complex. There are systems that can do all of that with the touch of a button, they are called mutual funds. The only way you are going to make any money with that system buying individual stocks is that you have to have a lot of money to start and you can pay no commissions.
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By: zyberianwarrior

zyberianwarrior — Sat, 10 Apr 2010 20:08:59 +0000

I don't like it and here is why. You are focused on large cap high dividend stocks and some of those stocks that have that high of a dividend typically mens they do not have any room to grow and is stagnanat. (or one helluva of a utility or bank play) selecting these stocks severly limits you on where to invest as well. Having debit is not necessarly a bad thing which a lot of businnesses (especially retail) operates on debit. You need to spread it around a bit take some risks
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By: johnnylakis

johnnylakis — Sat, 10 Apr 2010 19:43:59 +0000

I like those rule. You should look at potential growth rate as well
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