Overall a pretty good week. A good call on GES, it continued to decline despite good earnings news (I will never understand the stock market). I stuck to my guns today despite things looking bad for a while. My system is working and I’m up around $6,000. The key is to not get cocky and shoot for those 1 to 2% gains each week and limit my loses.
I sold GES today after it went up 5% and then came down to less than a percent at 1:30 pm. I could have made more if I had left the 3% trailing stop in, but I figured it was going to hold with the quick 3% it gained at opening. The overall market was down, so that might have pulled everything down. Overall, I’m satisfied with how I handled GES as compared to CRDN. I kept it even though it dropped from the Zweig screen. Overall it made 21% during the time I held it. It made an extra 12.06% while I held it after it dropped off the screen. Good call, Scott. I bought TSS at 29.35 with the money from GES as Zacks upped the rating to #1. It had a 10% day yesterday so it looks like a strong pick.
I bought ACO this morning but had to watch for 10 minutes before the order kicked in. It was a mistake because I bought it after it had jumped 2%. It had volume around 100K so next time I need to be careful not to jump in too soon. I sold $1000 worth of AEOS as it had broken the 10% barrier. AEOS has moved to a Zacks #2. It’s still a strong stock and still on the Zweig screen so I will keep a wide stop on it. I put a 3% trailing stop on GES (no longer on Zweig's screen). The day ended up good. GES 4.12% and AMK 6.49% were my best performers. Overall I was up 1.59%. I feel good about the decisions I made today except for the ACO buy this morning.
Here’s what I learned this week. I kept stocks that were no longer on the Zweig screen because they were rated 1 or 2 on Zacks. My thinking was that the ZZ screen was pretty close on a monthly basis to the weekly rebalancing so I shouldn’t be too quick to drop a stock. This thinking was good as GES and CRDN took off on Monday. However, my mistake was that I didn’t put tight stops on the stocks and CRDN took a dive which I couldn’t pull the trigger on. It went on to lose Thursday big time. So the idea not to be trigger happy was a good one GES has done well, but I need to put 3% stops on them. I’m not worried about missing out through volatility. The stocks are no longer recommended so as soon as they disappoint, they’re done, but before that I’ll allow them to make me a few more bucks. If I had sold CRDN after it lost 3% and bought ANF I would be up almost $2000 more this week than I was.
My portfolio makes over 60% in a year and nobody seems to care. Either they don't believe me or they symbolically pat me on the head and tell me what a good job I did. My wife seems to be the only one who is excited. I guess people just assume that individual investors can't make it in the market. I get a few friends asking me to put their $500.00 in and make them a million (No way). But nobody seems seriously interested. I can't figure it out.
My name is Scott Carl. I am a full time employee and a graduate student. I don't have a ton of time to monitor the markets during the day, but I developed an interest in the stock market in 2003 after reading a couple of Motley Fool books. In particular The Unemotional Investor: Simple System for Beating the Market piqued my curiosity. It detailed how a simple unemotional trading plan could consistently beat the market without any unpleasant decision making. I dove into the market with a few thousand dollars and instantly made 20% in the first couple of months. I was a genius.
Success was fleeting as I continued making trades based on my own ideas about companies. I followed recommendations from just about every source out there, magazines, TV, trading newsletters, and just my own gut feelings. 2003 was a good year for stocks and it pumped up my ego.
In 2004 I discovered The American Association for Individual Investors through a reference in a Suze Orman book. There was a ton of good advice and information on the site and I became particularly interested in their computerized stock screens--in particular the Zweig screen--which was destroying all of the other screens with ridiculous returns year after year.
I started following the screens and paper trading different strategies on Smartmoney's excellent website. During that time I subscribed to AAII's Stock Superstars newsletter. I followed the newsletter's trading suggestions for over a year and learned a lot about stock screening, risk, and portfolio management. I did OK during those two years making a bit more than the market as a whole.
But I noticed that my screening strategies were making a killing compared to my returns. Worse yet, the strategies involved none of the "homework" that I was doing to try and find good prospects. So for 2006 I decided to pick one strategy and stick with it for the whole year. The strategy that I chose involves a group of about 5 stocks that are rebalanced on a weekly basis if necessary. The stocks are a combination of the Zwieg screen and Zack's #1 rated stocks each week.
The screen did very well in 2006 as you can see in my portfolio return for that year. Compared with the Zweig screen alone (which made around 17%) the combination screen screamed. I am following some other strategies in 2007 while continuing to use the Zweig and Zack's combination which I call ZZ #1.
I am not smart enough to be a chartist, and fundamental analysis bores me to tears. So this method works very well for me. The computer does the number crunching and I follow what it tells me to do without worrying about all the jibber jabber going on in the market and the world.
1) Beat the S&P 500
2) Beat the Stock Superstars Portfolio
3) Beat Charles Kirk's Yearly Return
4) Make 20% on Portfolio
5) Match or beat last year's return (62.44%)
6) Control my emotional trading and stick with the program
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