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!

16 June 2009

Some give and take

Martin writes...
"I read your articles about CMGR and I am a beginner investor struggling to make money in the market. But still fighting. I was watching this stock since April 2009 and I bought it in my virtual account (at that time I wasn't ready to use my real money). Then I decided to buy a real shares couple days ago. But may I ask you what you think about today's movement, or better to say a few days ago movement? Would you consider this as the end of the rally or just a correction and why? The price for the first time created low high, touched 21 day MA on high volume (and is damn close to my stop loss), would this be a red flag? I also found some articles on the net that it is time to prepare for shorting this stock. What do you think? Thanks for your answer."
Excellent question, Martin; thank you.

And a thesis I have mulled on for the past 1 or 2 weeks for a new post. (Which means I will have a lengthier post, and partial reply, than this one late this week. Albeit, not with GMCR as its focus chart.)

Until then, though, several data points in reply...
1) Know your time frame;
2) Place your interest (investment dollars) in a favored investment's appropriate periodicity;
3) Listen to no one's counsel (me included) but your own. No one knows as well as you your objectives, risk tolerances, and time frame;
4) Acknowledge that stocks oscillate always, but within trends (up, down, sideways). Invest your money when the trend verges on becoming favorable, not when it is long in the tooth.

I could continue, but the markets open within minutes, so I will close with this final comment: Yesterday's action does not concern nor frighten me. More than this precis, though, must await the future post.

Full Disclosure: Long Green Mountain Coffee Roasters/GMCR
-- David M Gordon / The Deipnosophist

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