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During the past few months, even in this awful market, I have been making several hundred dollars a week doing something that resembles low frequency day trading. It has worked pretty good indeed, but feels a bit like a bad habit because of the easy money. Here is what I do:

1. I constantly look for relatively low PE or modest PEG, high beta stocks in the $20-80 per share range. I happen to be comfortable with tech stocks but have worked with many different segments.

2. I have from ten to fifteen thousand dollars that I am willing to commit at a given time.

3. I look at my little group of stocks and try to identify a trading range for each one. I invest my money in one or two of them at what I surmise to be the bottom of their standard trading ranges.

4. When they go up from 2 to 5 dollars per share, I sell. I seldom have to wait more than a few hours or at most a day or two for this to happen. Every time it happens I make from $700 to $1500. Once this year I let ADCT run a bit and made $5200.

This is very tax inefficient, but it also seems very easy. If one of my little "investments" were to tank, it is a company that I would not mind sitting on for awhile. I avoid bad companies and will not touch negative earnings companies, biotech, Internet, or other companies that move moslty on news. I will admit that I tend towards the mid-cap companies, although there are plenty of blue chip companies that have a reliable five to ten dollar trading range.

My question is this: How many others out there are doing this? Are you having fun, too? Is this, in truth, a VERY BAD habit? Exactly how foolish is it?

Ken G.
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