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ADXcellent Group! >
About Choosing Stocks
December 16, 2006
I wanted to make clear something that came up at the
meeting.
Minimum criteria are used merely to determine whether a
symbol makes it to your watch list or not. These are your
standards on which a decision can be based. Criteria define
potential candidates. Period.
The criteria should be objective and quantitative, not
subjective. The criteria should be clear, easy to
calculate, and easily understood. The criteria must be
usable. In determining how well a candidate meets a
particular criterion, evaluation is based on actual
performance. (After all, who cares what the ratings are if
the stock is only going down, i.e. MRGE was IBD ‘A’ rated
before the drop) There are thousands of stocks, minimum
criteria helps you pare down the possible candidates.
Whether it is IBD ratings, or your own research thru Value
Line or Yahoo, or a newsletter, or the Great Xpectations
List, anything can be ideas for trades. Some people simply
choose to trade a certain sector, and that is their
criteria. Anything at all can help you choose. The money is
not in the picking, it is in the trading.
We teach trading. You must do your own picking.
I personally do not find IBD ratings reliable for my
minimum criteria. That does not mean it is not suitable for
your minimum criteria. One thing I believe our group agrees
on is that we will choose candidates with positive
fundamentals. I hope we’re clear on this and can end the
‘picking’ questions.
The money is not in the pick, it is in the trade.
There are many ways to trade, but only one acceptable
result. If what you have been doing is working, keep doing
it. If you want different results, try something different.
The Great Xpectations List are simply my ideas in our free
weekly newsletter.
Now, Go Trade the Right Way!
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