bigtrough >ByVolume, I owe you on HLT. Nice. I
feel sorry for my friends at TTN. I pulled the plug
awhile back. I am preserving capital these days for the
lows that are coming.
Thanks and sorry for my
ruddiness in the past. My karma seeks peace accompanied by
Chin, which has always stood for �To your Health�
features traditional Chinese
A very good article in
the Fortune magazine
Fortune.com (October 2,
2000) the latest issue on the Internet
From Here to Uncertainty
The economy and markets
have steered one another to points we've never seen
before. So where are we headed now? Here, some
When Is a Bubble Just a Bubble?
Are we still in the
early stages of profound and permanent changes in the
way companies around the world will do business? As
long as everyone believes, VCs will become really,
ByVolume: Bigtrough, Sometimes over
confidence in the Stock Market can be hazardous to your
Selling Stocks To Cut Losses
Click on IBD Learning Center
The IBD Learning Center
Course I � How To
Select The Right Stocks At The Right Time
Course II �
How To Sell Stocks To Maximize Your Profits
III � Tour Investor's Business Daily
Stocks To Cut Losses
"It's a dangerous fallacy
to assume that because a stock goes down, it has to
come back up. Many don't, and some take years to
� William J. O'Neil, Chairman & Founder of
Investor's Business Daily
Cutting Losses, continued
Cut Your Losses Early
The first rule is
sell any stock that falls 8% below your purchase
price. Why 8%? Because research shows stocks showing all
the right fundamental and technical factors in place
and bought at precisely the proper buy point (which
is explained fully in the �Using Stock Charts To
Round Out Stock Selection� lesson of the stock buying
course) rarely will retreat 8%. If they do, there�s
something wrong with them.
You may think a stock is
due to rebound. But the market could send the stock
to lower depths regardless of your views or what
analysts and commentators say on TV. No excuses, no
alibis. You may want to sell even before an 8% loss if
you see other signs of weakness in a stock (we�ll
explain these throughout this course).
emphasizes the importance of buying at the right time. If
you don't and you buy a stock that is overextended
(that's reaching the end of its climb), chances are it
will hit the 8% sell level as it goes through a normal
pullback. Make no exceptions to the rule. The best stocks
will always give you other opportunities to buy.
Here's another way to look at it: Once a stock falls 8%
below your cost, does it still look attractive? Is it
still among the best stocks? Probably not. There�s no
guarantee that it will go back up, and you need to protect
The bigger the fall, the harder it is to recover. Say
you bought a stock at $100 a share. It falls 20%, to
$80. To get back to $100, the stock has to make a 25%
gain. Another example: The stock plummets 50%, to $50 a
share. It would take a 100% jump to get it back to $100
� and how often do you buy a stock that doubles?
And if it does, how many weeks, months or even years
does it take to get there? Wouldn't you rather cut
your loss early, and free up money to purchase another
stock with better chances of doubling?
for listening and Good Luck in Your
But the boom times of recent years have moved
mundane items like energy efficiency, and U.S. dependency
on imported oil, completely off investors� radar
screens. So, not only are investors shrugging off the
rising oil prices, but it�s gone largely unnoticed that
oil-import dependency has not only deteriorated to the
previous dangerous levels of 1973, when 34% of U.S. oil
consumption was imported, but exceeds those levels, with 48%
of U.S. oil consumption now imported. The average
fuel economy of new cars and trucks has actually
declined 6% over the last 9 years.
And what about
our individual reaction to the rising prices? Do we
really care enough that it costs $8 more to fill the gas
tank this year than it did last year, to cut back on
our driving? I don�t think so. But then, even in the
previous oil crunches, it wasn�t the rising price that got
our attention as much as the shortage of available
fuel, the frustration of the long lines at the gas
So crude oil prices have almost tripled in less than
two years? Gasoline, heating oil, and other energy
costs are rising as fast as in any previous oil crises?
So what? Sure, gripe about it some. But as long as
the fuel is available and the economy is booming, and
stock prices are holding up fairly well, who cares?
Meanwhile, Washington is certainly too pre-occupied with
getting elected right now to bother with anything as
unimportant as oil prices and the economy.
seems that each of the previous periods when oil prices
soared, were dire for the economy and the stock market.
Investors might find it beneficial to take their eyes off
the excitement in the Nasdaq long enough to keep up
with the developing situation regarding OPEC, and the
already substantial spike-up in oil
BEING STREET SMART
by Sy Harding
learn anything from the rising oil prices created by
the 1973 Arab oil embargo, or OPEC�s doubling of oil
prices in the late 1970s, or the spike-up in oil prices
during Iraq�s invasion of Kuwait in 1990? There may be a
lesson to be learned, since each of those previous
periods was followed by a recession, and accompanied by a
bear market for stocks.
For a long while it
seemed like the world, and particularly the U.S., had
indeed learned a great deal from the 1973 oil embargo,
and particularly after OPEC increased prices
dramatically again in the late 1970s. Determined to no longer
be dependent on imported oil for 34% of its oil
usage, the U.S. began an impressive push to decrease
overall energy consumption, while simultaneously
encouraging use of alternate fuels.
55 mph speed limits, and mandated increasingly
strict fuel efficiency standards on auto manufacturers,
which ended the era of fuel-guzzling behemoths. The
Energy Department was created to develop a national
energy policy. Housing codes were introduced that
required substantially increased energy efficiency in new
homes. An effective educational program had us all
re-insulating older homes, using wood-stoves, and comparing
energy-efficiency ratings when buying appliances and electrical
equipment. That in turn had manufacturers determined to
produce the most energy-efficient products possible.
Incentives were offered for development of alternative
energy sources, and many electric utilities and large
companies switched to coal-fired equipment, so domestic
coal production increased.
surprisingly well. From 1976 to 1985, the average fuel economy
of automobiles nearly doubled. The other initiatives
contributed proportionately, with the result that between
1977 and 1985 the amount of oil being imported into
the U.S. declined by a significant 31%. With demand
down, the price of oil, which had peaked at $53 a
barrel in 1981, was under $20 a barrel again by
Unfortunately, higher oil prices are like interest rate hikes.
Once they begin to rise it takes some time for them to
filter down into the broad economy where their effect is
noticed. By then the damage to the economy is frequently
The OPEC countries ended the
1973 embargo in 1974 and began shipping oil again. But
the world had already been thrown into a serious
economic recession by the inflated energy prices. Being a
forward-looking mechanism, the stock market had already
anticipated that outcome, and had entered the 1973-74 bear
market (in which the Dow lost 45% of its
Sharply rising oil prices again in the late 1970s,
accompanied by soaring overall inflation, resulted in
back-to-back recessions, in 1980 and again in 1982. The
stock-market, anticipating the problems again, was hit by a
bear market from 1978-1980, and another from
In more recent times, another spike-up in oil prices
took place in 1990, a result of Iraq�s invasion of
Kuwait, and the U.S. intervention with Desert Storm. Oil
prices quickly rose 60%, from $15 a barrel to $24. Sure
enough, the last economic recession in the U.S., and bear
market for stocks, also took place in
Therefore it seems that investors should be paying more
attention to the current situation. Oil prices almost
tripled, from $13 a barrel early last year to this week�s
$37 a barrel, before backing off some.
Adviser to traders of the twenties: William D.
Gann, born and educated in Texas, arrived in New York
in 1903, working as a registered representative, a
stock market letter writer, and an analyst until
In that year, Gann launched forth with his own
advisory organization publishing a market letter called
�Supply and Demand.�
He is remembered chiefly because
of eight books for investors, widely known in their
The best known were Wall Street Stock Selector
(Financial Guardian Publishing Co., 1930); 45 Years in Wall
Street (Lambert Gann Publishing Co., 1949); and Truth of
the Stock Tape (Financial Guardian Publishing Co.,
1923). Gann died June 14, 1955, at the age of
IN ORDER TO make a success trading in the stock
market, the trader must have definite rules and follow
them. The rules given below are based upon my personal
experience and anyone who follows them will make a
1. Amount of capital to use: Divide your capital
into 10 equal parts and never risk more than one-tenth
of your capital on any one trade.
2. Use stop
loss orders. Always protect a trade when you make it,
with a stop loss order 3 to 5 points away.
overtrade. This would be violating your capital rule.
Never let a profit run into a loss. After you once have
a profit of 3 points or more, raise your stop loss
order so that you will have no loss of capital.
Do not buck the trend. Never buy or sell if you are
not sure of the trend according to your charts.
When in doubt, get out, and don't get in when in
7. Trade only in active stocks. Keep out of the
slow, dead ones.
8. Equal distribution of risk.
Trade in 4 or 5 stocks, if possible. Avoid tying up all
your capital in any one stock.
9. Never limit your
orders or fix a buying or selling price. Trade at the
10. Don't close your trades without good reason.
Follow up with a stop loss order to protect your
11. Accumulate a surplus. After you have made a
series of successful trades, put some money into surplus
account to be used only in emergency or in times of
12. Never buy just to get a dividend.
average a loss. This is one of the worst mistakes a
trader can make.
14. Never get out of the market just
because you have lost patience or get into the market
because you are tired of waiting.
15. Avoid taking
small profits and big losses.
16. Never cancel a
stop loss order after you have placed it at the time
you make a trade.
17. Avoid getting in and out of
the market too
I can�t afford to buy anything at Rodeo
I can�t afford to stay at the Sofitel Hotels
Yes, for $399 per week, I can afford to stay at the
Extended Stay America.
Los Angeles - Woodland Hills, CA
StayAmerica Efficiency Studios
Current rates from
$399 per week; $79 per night
An energy crisis means it is cheaper to stay than
commute back and forth to LA.
The transit strike according to Los Angeles Times
(latimes.com) has also created demand for ESA.