StockPunk

Here's one of the e-mails I received today:

I've been a Kirk reader for some time and have learned a lot from his stuff. He's what pointed me to your blog, which I found interesting, informative and amusing. Also, your 2006/2007 performance is very impressive.

As a Zacks Elite subscriber, I too use Zacks Rank with my screens. You mentioned you use Zacks with the AAII Zweig screen to boost performance. Now you've convinced me to join AAII, which I knew about but had never joined.

Would you mind sharing with me the details of how you rebalance weekly? Traders have differing methods for rebalancing, and I'm always interested in learning how successful traders manage their trades. Thanks.

My reply--

Thanks for your e-mail and your encouraging comments. I’m glad you found some things amusing. Sometimes I have no idea what I am doing and I think it is good to communicate that. The only thing that I can’t figure out about my performance is why an idiot like me can earn that much when there are much smarter folks out there who struggle to beat the market. It worries me sometimes that I have just been lucky the last couple of years and that I really am just a dweeb that doesn’t have a clue.

Zacks has a really cool stock screener called Research Wizard (you’re probably familiar with it). I’ve done the 2 week trial a couple of times and I like it, but I haven’t been able to justify the $1,000 per year price tag yet. I think I would be very interested if I could seamlessly incorporate AAII’s screens into Zack's screener. I use AAII’s Stock Investor Pro which costs around $200 per year.

I really don’t have a tried and true system for rebalancing. I don’t actually rebalance each week. I re-evaluate my holdings each week. I heavily emphasize stocks that match the Zweig screen, Can Slim Screen, and a few of the others and then filter the stocks with Zack’s #1 ranking. I hold around 5 stocks until something changes—either the stock no longer appears on the screens or it loses it’s Zacks ranking. (If the ranking changes from a “1” to a “2” I might tighten my stops a bit, but not much. If it changes to a “3” it’s over for the stock and I put a 3 percent trailing stop on it.) That’s pretty much it. Nothing too complicated.