No. of Recommendations: 3
I started using the BMW method during the interlude between the 2001 and 2008 bear markets, and my implementation has evolved over the years. I've built a spreadsheet of BMW candidates, set up some buy and sell rules, and let it run for a while. I'm working on some updates to correct weaknesses. This is a good time to share thoughts with the BMW community, not only to bring some more life to this board, but also to help us all learn a bit.

There will be some math involved when I discuss formulas.

First, my basic guidelines:
I don't use leverage. Been there, done that, have the scars.
I prefer dividend growers, but I have learned there are companies that pay/grow dividends when they shouldn't, and others that don't pay/grow dividends when they should. I would like to deal with these situations more effectively.
Position sizing matters. I've been using 1% as an initial position size, and averaging down when appropriate.
I sell covered calls and cash-secured puts when worthwhile. I would like to improve my criteria.
It's okay not to be fully invested in stocks; I'd prefer to have dry powder to take advantage of bear market bargains when they appear.
The BMW method is not suitable for all stocks, and it's important to figure out how to differentiate.
It's okay to sell when a stock is below +2 RMS. I would like to improve my sell guidelines.

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