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RAGE

Funny you should mention this method.I've actually done some work in this area with regard to exiting or standing aside ---as a condition to be used as a filter for systems. Simply selling out when the market downturns doesnt help systems.However there is evidence that if a stock begins to under perform an index by X% then its exit could be beneficial.The amount of work required to test all variants of comparison with stocks and indexes is massive something that I don't currently have time for.

Another really interesting area Ive been working on is to create an index from your universe of stocks---in your case you have one the ASX 200 or XJO.Then make an index of your portfolio---compare the relative strength of your portfolio index to your index and or the Core index and use that as a filter.

This as we have mentioned is a very valid point however if the stock falls 30% and you still sell then you still have 50% capital gains if not held for 12 mths---actually compounding you dilemma.

The way I see it from your posts basically its hold tight if the market (Economic Conditions) are the cause of the down slide in your holding,if the market is OK and there is a noticeable slide without reason then sell.

Leads me to this question.

Economic slides CAN and do have an impact on the fundamentals of many businesses positive and negative,how do you pre-empt their effects on a company whilst holding it in the confidence that the down turn is economic rather than Company Fundamentals?

As You can see the only problems I have with Fundamentals is not the valuation getting in part but the getting out and evaluating risk.

For me its simply a line which if hit renders my analysis incorrect for the time being and my exposure limited to 1-2% of total capital.
I can always get back in.
However a 30% loss means I then need a 60% gain just to break even on any stock which blows out to the downside that amount or more!

Its not often you see a stock fall 30% then rise 60% in the near future.

Not Saying one is better than the other just finding those aspects I find difficult to comprehend and asking someone who knows far more about Fundamental trading that I probably ever will.

<blockquote data-quote="tech/a" data-source="post: 246873" data-attributes="member: 257">RAGEFunny you should mention this method.I&#039;ve actually done some work in this area with regard to exiting or standing aside ---as a condition to be used as a filter for systems. Simply selling out when the market downturns doesnt help systems.However there is evidence that if a stock begins to under perform an index by X% then its exit could be beneficial.The amount of work required to test all variants of comparison with stocks and indexes is massive something that I don&#039;t currently have time for.Another really interesting area Ive been working on is to create an index from your universe of stocks---in your case you have one the ASX 200 or XJO.Then make an index of your portfolio---compare the relative strength of your portfolio index to your index and or the Core index and use that as a filter.This as we have mentioned is a very valid point however if the stock falls 30% and you still sell then you still have 50% capital gains if not held for 12 mths---actually compounding you dilemma.The way I see it from your posts basically its hold tight if the market (Economic Conditions) are the cause of the down slide in your holding,if the market is OK and there is a noticeable slide without reason then sell.Leads me to this question.Economic slides CAN and do have an impact on the fundamentals of many businesses positive and negative,how do you pre-empt their effects on a company whilst holding it in the confidence that the down turn is economic rather than Company Fundamentals?As You can see the only problems I have with Fundamentals is not the valuation getting in part but the getting out and evaluating risk.For me its simply a line which if hit renders my analysis incorrect for the time being and my exposure limited to 1-2% of total capital.I can always get back in.However a 30% loss means I then need a 60% gain just to break even on any stock which blows out to the downside that amount or more!Its not often you see a stock fall 30% then rise 60% in the near future.Not Saying one is better than the other just finding those aspects I find difficult to comprehend and asking someone who knows far more about Fundamental trading that I probably ever will.</blockquote>

[QUOTE="tech/a, post: 246873, member: 257"] [B]RAGE[/B] Funny you should mention this method.I've actually done some work in this area with regard to exiting or standing aside ---as a condition to be used as a filter for systems. Simply selling out when the market downturns doesnt help systems.However there is evidence that if a stock begins to under perform an index by X% then its exit could be beneficial.The amount of work required to test all variants of comparison with stocks and indexes is massive something that I don't currently have time for. Another really interesting area Ive been working on is to create an index from your universe of stocks---in your case you have one the ASX 200 or XJO.Then make an index of your portfolio---compare the relative strength of your portfolio index to your index and or the Core index and use that as a filter. This as we have mentioned is a very valid point however if the stock falls 30% and you still sell then you still have 50% capital gains if not held for 12 mths---actually compounding you dilemma. The way I see it from your posts basically its hold tight if the market (Economic Conditions) are the cause of the down slide in your holding,if the market is OK and there is a noticeable slide without reason then sell. Leads me to this question. Economic slides CAN and do have an impact on the fundamentals of many businesses positive and negative,how do you pre-empt their effects on a company whilst holding it in the confidence that the down turn is economic rather than Company Fundamentals? As You can see the only problems I have with Fundamentals is not the valuation getting in part but the getting out and evaluating risk. For me its simply a line which if hit renders my analysis incorrect for the time being and my exposure limited to 1-2% of total capital. I can always get back in. However a 30% loss means I then need a 60% gain just to break even on any stock which blows out to the downside that amount or more! Its not often you see a stock fall 30% then rise 60% in the near future. [B]Not Saying one is better than the other[/B] just finding those aspects I find difficult to comprehend and asking someone who knows far more about Fundamental trading that I probably ever will. [/QUOTE]

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