Van Meerten's picks

The Market is like a game of Frogger

The Market -
According to BarChart.com 67.59% of the stocks are trading above their 20 day moving averages and the Value Line Index has made 9 new highs in the last 20 trading sessions. Still too short of a trend to call a rally but not a Market I'd like to make additional shorts into.

My portfolio should now reflect 65% long so I'll reallocate sell my losers and add some new long positions.

"Know when to hold 'em, know when to fold 'em, know when to walk away, know when to run" Kenny Rogers - The Gambler

At the Money Show everyone was looking for stocks to buy. People would ask: " What should I buy?" and then quickly write it down. They never seemed to ask: " What values stocks are selling at a good price?" or "What growth stocks are still keeping their earnings momentum intact?" I never heard anyone say: "I'm a growth investor, what stocks do you think will grow and why?" There were very few questions about pruning out the dead wood or accumulating cash. No plan.

That's why my title is Right now the Market is like a game of Frogger. The Market is a highway going in both directions at once. Some stocks are going up and some stocks are going down and all in different directions and at different speeds. Too many investors just want to buy and never ask why or what the plan might be.

Remember that you add or delete a stock from your portfolio because it fits your plan.

The person who will make money in this market is the ones who have a disciplined plan to accumulate value, growth or momentum stocks into their portfolio and also have a disciplined plan of when to sell.

Don't just look for buy/sell recommendations. Look for advice on how to develop your plan and the tips on how you can stick to the plan.

Stock investors sometimes remind me of dieters. Everyone wants a secret quick fix. Just like weight loss has no secret, just eat right, exercise and practice portion control. Investing also has no quick fix. Study and learn, match your investing style to your needs and personality and then practice the discipline to stick to your plan.

Know that the Frog will get smashed if he jumps from lane to lane without knowing what's happening in the lane he's leaving and the lane he's going to. Don't jump into lanes until you know the where and why of the lane and don't jump in and out of stocks if you don't know why you are buying or selling.

Make your plan, then work your plan.

DISCLAIMER: The stocks selected should not be taken as buy/sell recommendations. They are the stocks that were selected by my stock screening process and then each was analyzed before adding or subtracting from the portfolio. Do not concentrate on the stocks but learn the selection process.