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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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