|StockFetcher Forums · General Discussion · Up over 100 % on TEX now!||<< 1 2 >>Post Follow-up|
- Ignore as214
|5/30/2007 8:14:13 PM
If I was a short term gambler...mmm mm black magician...um I mean daytrader BBWAAH I would have sold TEX at 45. Instead I do as Mr Graham and Mr Buffett have taught me. I simply attempt to be fearful when others are greedy, and to be greedy when others are fearful. Thank you for listening.
9/14/2006 5:51:34 PM
OK Niko.. I certainly respect your opinion and I read all your posts as I have learned from you. I was only trying to help the above poster out and let him know what has given me triple digit gains the past couple of years while allowing for minimal time in front of the computer. . PS.. Thank you for your EMA9/DMA 28,-14 crossover sell signal that I learned from you. Itr is something that i look at when I am contemplating selling a security..
PS.. For those of you who dont like low priced stocks consider TEX as my selection for my Vector Vest contrarian sector value play.
- Ignore limestar
|5/30/2007 11:44:32 PM
- Ignore nikoschopen
|5/31/2007 1:30:17 AM
Okay, there's no doubt that ure one hell of a self-proclaimed market wizard. While you raised a valid point, I'm happy to stick to what I know best -- daytrading. Since I've never personally advocated for daytrading, nor have I claimed that it was better than any other method of investing, I don't understand why ure so bent on discrediting daytraders in general and me in particular. But then again, ure entitled to freely dispense ure personal opinion.
- Ignore xray
|5/31/2007 7:44:35 PM
as a new SF member I read with interest your posts as they relate a lot to my style and comfort of investing/trading. I have some questions if you are so graceful to answer:
1. How did you choose TEX from a bunch of similar stock patterns in Sep06?
-they must be some steps wich I didn't grasp yet.....
2. Where can you get the Indusrtry PE and P/S data from? I searched and still could not find yet a source...(did not try yet the VV, if this is where you get it from..)
3. You mentioned the exit system EMA9/DMA(28,-14) , and I looked at TEX and it had 4 exit triggers so far from Sep06. Will you be kind and explain why you didn't sold, or what other combination you use for a warranted exit, please?
I like to choose stocks with LEAPS like your option friend is doing, as I think that when you play a small acount like mine, a small exposure gives you a higher reward; but when you invest high$$ as you do, I guess it is safer to use the stock instead (no time erosion here)...
I do apreciate an answer, or if it is more convenient, email me at ax_ray2222 at yahoo dot com .
- Ignore as214
|6/1/2007 10:10:58 PM
Thank you for inquiring about my specific value oriented methodology in regards to TEX. I am a pure disciple of Buffett and Ben Graham in that I dont care what the market is doing it's irrelevant. I don't try to guess what it will do..also irrelevant and very costly. I simply focus on individual companies that are priced at least 40 percent below their true values, no matter what industry or sector they are in. Here's the kicker.. right before I picked TEX I finished studying extensively on Peter Lynch, and reading some of his works. In my opinion Peter is one of the most..if not the most underrated value minds of our time. His forte and advocation focuses on picking the most highly discounted stock in an industry which is out of favor and beaten down the most..assuming that 1. The beaten down industry is fiscally sound 2. The most attractively valued stock within that industry is worth buying. Bottom line is with TEX I used a combination of Buffett and Lynch teachings..Here's how I did it with VV.
1. In Sept. 06 I forget the exact day... I decided to do my weekly industry analysis. I clicked on Industry Viewer and that brings up all the industries represented by VV. In order to quickly find which on was beaten down the most I double clicked on "RT" which stands for Relative Timing. Double clicking will sort the industries based on their current RT readings. I chose to sort from lowest RT to highest RT. The industry with the lowest RT (meaning beaten down the most) was Machinery(Constr/Mining). I then look at the cumulative PE and PS multiples of that specific industry to assure of fiscal soundness. All this info is available right on the screen sorted nicely. The PE was approximately 11.5, and the PS was .57! Both respectable numbers for a full industry. Then I double click on the name of that industry Machinery(Constr/Mining) and that automatically pulls up all the companies within that industry. At this point I look at the two or three stocks with the lowest PE multiples within that industry. TEX had the lowest PE around 9, and had a PS multiple of .60! Also, I had TEX on my radar a week earlier as it was one of the cheapest individual equities as I was appraising it by the Graham formula. I knew I would end up buying it but before I did that I also wanted to monitor inside activity. Before I buy anything I go to form4oracle.com and see what the insiders are doing..especially Financial officers. No significant insider sells so them Im about ready to buy. The financial aspect is taken care of, now I focus on the technical for entry. I simply use RIGGS' DMA 28,-14 criteria of price below DMA line and DMA line starting to move horizontal to slightly slope upwards away from price. If I see all of the above Im buying.
As for where to get PE and PS I believe you can also get that info from Yahoo, but I dont think you have the ability to sort and backtest there. As far as free financial data that provides the greatest degree of accuracy Id say probably Reuters from what Ive seen.
My greatest sell signal is VALUE. I will sell a company when it reaches its true value. When I exit from a technical aspect Ill use the parameters which I learned from Niko. If it is still underpriced I will disregard the sell signals.
- Ignore xray
|6/2/2007 1:19:29 AM
thanks a lot for the answer and I do appreciate very much your help and kindness in sharing your succes with struggling novices like myself....
1.I checked back my calculations for TEX based on Graham formula :
Sep'06 TEX Intrinsic Value = 102.19 using 2nd Qtr 06 data & AAbonds=5.8%
Jun'07 TEX Intrinsic Value = 29.64 using 1st Qtr 07 data and same bonds
Are this values close to what you looked at back in Sep06? Also are you looking to discard now TEX due to lack of growth? or maybe on a sell signal as you stated? ( DMA(28,-14) crossing down on EMA(13), is it right?)
2.I didn't grasp exactly the entry explanation based on DMA, it looks to me that it is subjective to individual interpretation.... like I would interpret different the slope of the DMA than you, so I will use a different entry day....
will this be correct? or it can be reduced to a simple math formula?
3. Do you use VV on a weekly basis to scan for undervalued industries ? Do you have a treshhold for how undervalued means? like they must have a correction of at least 20% or 30%....etc? or you look only on the first undervalued line in VV?....also every week will be another undervalued Industry...with other good discounted stocks there....are you tracking them in a program/excel? to determine the entry on them?
4. sorry about all the questions, I have a small account to start with and I know I don't have much room for mistakes so I try to start as safe as I can...that is why I was looking at Leaps to replace the stock...maybe you have some suggestions from your experience....
Looking forward for your response, thanks again, xray
- Ignore as214
|6/2/2007 11:50:47 PM
1. I haven't run TEX through Graham formula since I purchased it , but your Sept 06 calculation looks about what I got when I did it. As for June 07 I think you probably left out a 1 infront of the 29, as there is no way that TEX real worth is 29/share. Currently VV is appraising TEX at 143/share(probably a bit high) and smartmoney.coms price check calculator has it just over 100 I believe(definetly too low). To get a free intrinsic value on a stock go to smartmoney.com! Click on tools on the left hand sign of screen, then drag down to price check calculator. As for when I sell, unless there is scandal or something has changed significantly on a stock I will hold. TEX is still undervalued, there hasnt been a significant amount of insider selling (form4oracle.com), and most importantly IT IS STILL UNDERVALUED.
2. In regards to DMA(28,-14) there really isnt a way to reduce it to a mathematical formula in regards to its relation to stock price and slope and when to pull the trigger on a purchase. It is a nice indicator, but putting so much effort into it would give it attention that it doesnt warrant imo. It is simple..just eyeball the DMA line and the stock line. Make sure that DMA is above the stock price(which it will always be when you buy a true beaten down value equity). If the DMA is still sloping downwards the stock will probably still descend slightly further. If the DMA line turns sideways the stock will probably consolidate, and when it turns upwards it should start to move up. Now bear in mind, as a guy who anticipates holding for at least a year when I buy something I dont worry about the turning up part of the DMA. With TEX, I just waited for the DMA line to turn horizontal..which combined with the fire sale value I was getting made me confident that the bottom was pretty much in. Bottom line is Support/Resistance lines, trendlines, and DMA are all I ever need as long as I have value.
3. I run VV scans periodically, without any definite or defined time frame or constraints. VV is a passion of mine as I am intrigued with it. I have spent over 1000 hours backtesting, scanning, brainstorming on it and I love it. It is a passion of mine, so basically whenever I feel like it Ill play around with it. As for my definition of undervalued Im afraid it is not very original. I prescribe to Ben Grahams "margin of safety" brainthink that is accomplished by buying a stock of a large company that is undervalued by at least 40 percent. I dont track via excel or any other program for that is more work than is required to be successful. I just keep everything in my head, maybe jot down a couple of notes, and of course VV. Their database runs back to the 90s so I can accomplish everything through that.
4. As for leaps, I havent ever utilized them. If you go to the elitetrader.com site , there is a forum devoted exclusively to options. You can ask there but make sure the emphasis is on VALUE INVESTING WITH LEAPS.
- Ignore xray
|6/4/2007 5:56:27 PM
thank you so much for all the detailed answeres. I start to understand that the forte point of your selections is VV, and as I don't currently have it, I can't emulate your searches and findings.
1.I was wondering if you have a base list of good stocks you look after and wait to come down to the 40% discount buying point? If so, how did you created it, what criteria you used to screen for them?
2. I saw that you recommended stockscores.com as well....do you use it a lot or just to compare more the VV selections? or do you use it to screen for posible selections? will it be an alternative to VV?
Looks to me they are not many options out there with VV capabilities... I was reading a bit about ValueEngine.com or highgrowthstock.com, but don't have experiences with them and can not compare them with VV. From the compared descriptions semms to me that VV is the most easier to use to rank industries, sectors and stocks ....so I guess I have to give it a try....
3. Are you looking to buy usual after a correction in the market? or in that particular stock of let's say 20% ...30% correction...? or it is not important as long as the 40% value discount applies?
4. Checking different Graham Value formula with the smartmoney.com valuation and with the Investools.com formula, seems that it is a lot of discrepancy for same symbol....In your experience and research, after eliminating what didn't work, what did you kept as reliable sources? I guess VV is one....
Looking forward to your comments as always....
PS. If you would turn the clock back when yuo start investing, but with today knowledge, what will be the steps you will take with a limited capital for a limited risk investing aproach?
- Ignore TheRumpledOne
|6/5/2007 2:10:41 PM
It is also nice of you to take the time to help out a fellow trader.
Your efforts are appreciated.
- Ignore as214
|6/6/2007 12:04:30 AM
Thanks for the kind words RTO. No one has contributed more insight here than you. Ten years worth of technical analysis can be learned here in a month because of you.
1. I don't have a base list of stocks in which I wait for to come to my 40% margin of safety point. Rather, I discover those stocks that meet that criteria THEN wait for them to come to my buy point technically(re: DMA(28,-14) from the above post. My base list is essentially derived from VV. You would be amazed at how much a wonderful stock with no problems whatsoever could be discounted and beaten down excessively simply for no fault other than the industry which it happens to be associated with. Again VV provides all this info readily infront of me. Price, and true value are right alongside RT, PE, PS, as well as about 15 other columns of pertinent, concise info. updated daily. Now the good news for those who can't afford and/or don't want to get VV is that through extensive backtesting and fiddling around I've noticed that many of the companies that conform to my VV sector rotation value methodology also appear here:
IMO this above filter from MSN money is the best free, preset filter on the web. It answers the question of which is better value or growth.. The answer is both. It presents large cap stocks that are significantly undervalued and at the same time have large growth rates. VLO was on there in the 40s, TEX in the 50s, CAT months ago, AET etc. Now I noticed that you may be looking for something mechanical so what you can do is take this list...then utilize it with stockscores! Look at the companies from the filter that have the LOWEST score on that list in stockscores, then monitor their DMA performance on Prophet.net for entry. All free material, mechanical, and safe! The scores on stockscore are similiar to the RT timing function on VV so I hope this is what you're looking for. You can't do exceptionally well over the long haul when you buy what others are buying excessively, you must buy when nobody else wants them. Easier said then done, but this method will make it so you dont think about that!
2. To answer your question, yes imo from just the technical aspect of finding a stock with a low timing element stockscores is a viable substitute for VV RT function. The free weekly newsletter there is great too. The author of the site breaks down the psychological aspects of trading/investing better than anyone Ive seen with the exception of Van Tharp.
3. I don't worry about, or try to guess when the market is or will correct. That is the single biggest tangible reason as to why people lose money. I made triple digit gains in 2000-2001 buying up tobacco stocks that people were throwing away. VV lead me there RT, PE , PS made it a dead give away. The bear market of 2000 is a myth. It was painful only for those paying 4 times for Yahoo and Ebay what they were worth. If you went to the diner to buy a hamburger and soda and the bill was 7 dollars would you pay them 28?
4. As for discrepancies on value they do exist.. Smartmoney doesnt update their info daily like VV does, so it is not as accurate. It is free though so if you need to come up with a ballpark figure it could help. However, if you use one of the stocks from the above filter you can be assured that it will be highly discounted, especially if it is beaten down with a low stockscore signal score. SO to answer the question VV initially, then right before I pull the trigger I run the Graham formula. I dont really need the formula , but it just bring me back to my days of security anaylsis by hand . I do it to keep myself sharp !
If I could turn back the clock I may have studied LEAPS extensively, and learned about their viability in conjunction with value investing. Perhaps focused more on some lower price equities as well. But I have been fortunate to have alot of success so who knows maybe things wouldnt have turned out as well that way. If your goal is capital preservation with limited risk and a limited resources you have two options to garner substantial gains 1. High priced stocks but you must use LEAPS 2. Lower priced stocks where you can buy the shares. Each offer a slight amount of risk , however, you can mitigate that risk buy buying VALUE with that 40 % margin of safety. If you have a bridge that has a 10,000 pound limit, don't attempt to drive a 9,000 pound truck over it. Good luck my friend. With your inquisitive mind and eagerness to learn I have no doubt you will prosper greatly. VALUE and PATIENCE!
|StockFetcher Forums · General Discussion · Up over 100 % on TEX now!||<< 1 2 >>Post Follow-up|
Copyright 2016 - Vestyl Software L.L.C.•Terms of Service | License | Questions or comments? Contact Us
EOD Data sources: DDFPlus & CSI Data Quotes delayed during active market hours. Delay times are at least 15 mins for NASDAQ, 20 mins for NYSE and Amex. Delayed intraday data provided by DDFPlus