Van Meerten's picks

I've received a lot of nice comments but I'd like to share some misconceptions of my posts. The best advice I can give anyone is to find a good stock screener and/or information service and REALLY learn how to use it. I like BarChart because it's simple, easy to use and gives me more information than I actually need. It took me a few months to learn how to use the information but it's always right on and easy to use.

1 - Why do I want to know what the Market is doing? Sometimes the Market has no direction. I look for trends. I choose the stocks that that are presently having gains WITH the trend. If I don't see a trend, I sit on the sideline. If the Market has either a positive or negative trend then I go looking for stocks. By the way, if it means I'm out of Compliance because I'm not 65% invested I don't care, I'll sit out and preserve capital rather than lose money just to be compliant. Value Line may always be invested and Warren Buffet might wait through a couple of losing years for a stock he likes to bloom, but not me.

2 - It seems you pick stocks the same way not matter which way the Market is trending. That's exactly right. I want to look for stocks having new highs in whatever Market there is at the present time. My time frame is NOW. Not 6 months or a year from now. I invest as long as the Market isn't choppy.

3 - You are heavily weighted in energy. You got lucky by guessing the right industry at the right time but you won't keep doing that. WRONG! I didn't pick energy and decide to get over-weighted in it. I looked only for stocks that were hitting new highs. My portfolio is not 50% into energy because that's where I wanted to be. It just happens that 50% of the stocks making new highs are energy stocks. 3 weeks from now new highs might come from ag or steel stocks. I don't look for good industries, I only look for good individual stocks. I don't know and I don't care what the rest of that industry is doing.

4 - Your portfolio can go down as fast as it went up. WRONG! I jump right off any stock that drops 10% or trades below its 50 day moving average. I don't care what they do, who else owns them, what they produce, what Jim Cramer says, what they earn or who the manager is. If the price drops I'm out immediately, no questions asked. I'll look for reason it dropped later, but I'm out at the first cross of the 50 day moving average. The old "Let your profits run and cut your losses" adage.

The bottom line is just plain DISPLINE. I buy what is going up and sell what isn't. If nothing is going up, I sit it out and preserve my capital.

The way to make money in any market is to say on top of your portfolio. Each day you cull out what isn't giving you the return you want. Only buy when you find someting that is going up NOW.

I hope these comments help and I'd be glad to answer any questions. I've learned from making lots of mistakes but I try not to make the same mistake twice.

Capre Diem!

Comments: View Comments |  Tuesday June 17, 2008