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The Deipnosophist

Where the science of investing becomes an art of living

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Location: Summerlin, Nevada, United States

A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!

31 March 2005

Bottom fishing

Eh, what's that you say? You don't like buying stocks that already are running, too much risk even for the potential extra return... You instead prefer those stocks that presumably are in the process of building a long term bottom; thus, a limited risk exposure while granting for the lessened rate of return.

(NB: To articulate the difference I note above, note that those stocks already running -- breaking away from intermediate term bases within long term uptrends -- will chow down more points more quickly than those stocks that are in process of presumably building a bottom.)

Nonetheless, you prefer the secondary and tertiary stocks (this measure does not necessaily apply to the companies) because you do not like risk. Fine. Let's cycle back to the retailers, and examine two such opportunities. Gottschalks/GOT was already mentioned. Although its very recent action (the past ~2 weeks) appears to be a small base, it likewise appears to be setting up for an assault on higher prices. But do examine the weekly basis chart.

Saks/SKS also looks interesting...

In other words, this rotation from the former leaders into the new leaders -- the chicken cyclicals -- is not limited to the specialty retailers; both GOT and SKS are department stores! (In fact, this rotation to the chicken cyclicals also is not limited to the specialty restaurants. That is, I have not already shared all the leading groups, nor even the participants in each group.) Can you find and share others...?

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