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1. In a bear market I cannot just seek out superior companies. I have to seek out the best industries and countries, then look for the best companies in those areas.
2. ETFs are useful when I dont know enough about an industry or a country to be confident picking the best stock in that field. In addition, I can sometimes pick a good foreign stock by looking at the companies the ETF is invested in.
3. Short ETFs are great! For someone not sophisticated enough to be able to short effectively (like me) short ETFs are the way to go in a bear market.
4. Unlike a thinly traded microcap, with a larger company you really can, to a certain extent, make a prediction about its upcoming stock direction from the record of the market's past movement in it. Many thanks for Jim Van Meerten for getting me started on the right path for this.
5. To make the most money possible in a bear market one needs to be able to take advantage of the short bull rallies. This means being very nimble, changing strategies and being good at technical analysis. Easier said than done. I should practice this, maybe with a separate "throw-away" Marketocracy fund. However, right now my main fund does better when I stick with my longer-term, bear-market bets and grit my teeth until the market goes back down again.
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Comments (1)
Thanks for the complement. I learned a lot too and can't wait for SLO3 to see if the refinments to my strategies will actually work.
Posted by vanmeerten | July 12, 2008 1:20 PM