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Two times in the past three days Investor's Business Daily has mentioned the importance of disciplined selling of a stock at a predetermined percent loss - 7 to 8%. In fact the Monday Nov. 5th issue calls disciplined selling "the No. 1 rule of smart investing".

Examine the performance of stocks picked by Ernie's momentum model. If he had sold at a 7% to 8% loss he would have sold 17 of his eventual winners. By holding onto them he has 32 winners. That statistic makes him HUGE.

The following is a list of stocks picked by Ernie's model.
The percent drop exhibited by stocks held in portfolio before they were eventually sold for at least a 15% rise in value is shown next to the stock.

MDC 13.8
MTH 19.5
AXIA 0.0 not picked by mo model
DORL 11.2
RYL 30.1
BZH 0.0
COCO 20.6
TARO 6.2
PPD 38.0 not picked by mo model.
TUG 1.2
STRC 0.0
PQUE 15.2
ALLY 16.8
CHIC 0.0
KWK 5.0
HDWR 6.4
APL 0.0
AHMH 0.0
HOC 0.0
MTON 7.1
MOVI 0.0
MGAM 15.8
NVLD 2.4
RMCI 0.5
SMD 10.3
ACF 14.2
SHD 9.9
FCN 9.5
SCVL 20.4
MDCI 22.2
DKWD 11.5
CACI 8.0

Happy tradin' Steve
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Two times in the past three days Investor's Business Daily has mentioned the importance of disciplined selling of a stock at a predetermined percent loss - 7 to 8%. In fact the Monday Nov. 5th issue calls disciplined selling "the No. 1 rule of smart investing".

So you're agreeing... er... (Fwiw, I don't read IBD.)

Examine the performance of stocks picked by Ernie's momentum model. If he had sold at a 7% to 8% loss he would have sold 17 of his eventual winners. By holding onto them he has 32 winners. That statistic makes him HUGE.

I guess not. HUGE? I'm intrigued by the model but not glassy-eyed.

The point is, what -IS- the sell criteria with this model? I see very disciplined sales at +15%... yet nothing to protect from losing it all, dollar for dollar, or even one bad apple in the cart. KCS is that apple with ANF spoiling right next to it. I hope there isn't too much capital in either of them. Are they there just for the loss they generate to offset capital gains come April 15th?

- Sco
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I neither endorse nor condemn this model. If there was systematic selling at a percent loss endorsed by a knowlegable source many eventual winners would not have been realized.

For info on selling strategy please read the following thread:

http://leviticus.boards.fool.com/Message.asp?mid=15580790

Steve

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That's the answer I think I wanted to hear... lemme look at these "dogs" (my word) and see if I understand their value and if I'd agree to holding on to them. 'Back shortly...

- Sco
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