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Author: joelxwil Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75839  
Subject: Re: What's wrong with my calcs? Date: 10/3/2004 10:26 AM
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My criticism of Buffett was primarily directed to the dollar cost averaging. It is also obvious the Coke has been dead money for the last 5 years, and I think there must have been better opportunities.

So far as my long term record is concerned, it is virtually impossible to tell. When I started at MITRE in 1974, a certain percentage of my salary went into the retirement plan every pay day, which at one point was every other week, at another point was every week, and at yet another point was twice monthly. Even if I had those records, reconstructing what I have done would be way too time consuming.

Besides, I was not a very sophisticated investor at that time. For one thing, personal computers did not exist. Nobody could just pull up a chart. They had to be drawn by hand. I am quite sure I made a number of big mistakes, but it was difficult to get good information.

The crash of October 1987 cost me a bunch of money. It convinced me that I needed a better way of assessing the market, and that I should re-evaluate the market on a daily basis. On the Friday before Black Monday, I was out doing a bunch of stuff, and never looked at the market. Friday was a warning, but I missed it. Even at that time, I had sense enough to know that I should have gotten out that Friday. I went home and kicked myself. Oh well.

At some point I bought Fasttrack and began to study technical analysis. I traded mutual funds actively, and was quite successful with a collection of heuristic techniques. The PRISM method, first posted by Roy Merwin on the Fasttrack listserv, and which I describe on my site, is quite powerful.

I left MITRE in 1996 when the company lost the NASA contract. I officially retired and went to work doing the same thing I had done for MITRE, but with a different company. I still did not have good market timing techniques. I transferred the MITRE retirement accounts to an IRA and continued to trade mutual funds. I also traded stocks using the CANSLIM method. That was quite successful, but there are a lot of extremely subjective factors in that method, and it is a lot of trouble. I certainly beat the S&P during that period.

I also tried VectorVest, but with mixed results. On the other hand, it was a very volatile period of the market.

At some point I bought FastBreak. It gives a systematic, mechanical method of trading. I use common sense as well.

At this point I have a number of decent market timing algorithms, most of which are published on my site. They are written in Trade code, but could be converted to something else. I use a consensus of those systems.

I published a trading journal during the 1999 - 2001 period, but it was a lot of work to keep up. I have severe back problems, and sometimes just sitting down for long enough to write the journal leaves me in some pain. I did OK, and I did have the sense to get out in mid-March of 2000.

I am publishing a journal now (since September 2003), and will keep it up for as long as I can. I am back to tradng stocks, since the timing police will ban you from many mutual funds even if you hold for 60 days, and I lost some money earlier this year by holding on too long just because I was worried about that.

In 2003 I made about 30%, which is not very good. I traded a mix of bond and stock funds, whereas I should have been more aggressive and traded stock funds only. I had a hard time believing that the rally beginning in March was real. If I had been more objective, and believed the charts, I would have made more money.

There is more stuff in the introduction on my site.
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