Stockpicking
The key to great performance is to pick great stocks and to manage those holdings through the effect of various market conditions. If one buys 'right' in terms of selection and price then many ills are cured. Buy a winning breakout right in time and the ensuing correction is easy to handle and live through. Pay too much and at the beginning of a pullback and you'll be out of rhythm, prone to mistakes.
Understanding this, and much more, can bring outperformance. Today was a great example. Last week the bulls won a decisive battle and rallied right back to the old highs. With no major news over the weekend, the bias was to reposition, tighten up on stops and losses, and prune the portfolio. All that selling dropped the market 12 bps but the bulls kept buying a dozen solid winners of ours and generally the list was higher. Looking under the surface check out stocks like PCU, RL, DECK, MTW, GME, OSG, GOOG, RIMM, RCI, AAPL, DHR, that were all up nicely today, at or near new highs. On the down side there was little that hurt us badly, a few that dropped more than i'd like to see but that's ok becuase you can live with a few clunkers in a winning portfolio. The trick is what to do with them and how quickly. My main thought as we face a potential quarter-ending-window-dressing-meltup rally is that which stops working and starts to fade should simply be sold as we get into the July 4 mini break. Then we are playing slightly more aggressive stocks in a strong market but tolerating little weakness. Over the coming weeks we should build up enough cash that the next rebalance or unexpected opportunity will occur and we will be in shape to add at better prices. Nothing too extreme but enough to make the "trade" a good one. Bull markets reward mightily and also give the occasion blip that can be taken advantage of when you are playing with a lead.
So, we stay long the great stocks we have picked and expect good things but keep a foot on the brake pedal to manage the whole portfolio towards achieving our goals. More on that another time. Enjoy the gains!
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.
Understanding this, and much more, can bring outperformance. Today was a great example. Last week the bulls won a decisive battle and rallied right back to the old highs. With no major news over the weekend, the bias was to reposition, tighten up on stops and losses, and prune the portfolio. All that selling dropped the market 12 bps but the bulls kept buying a dozen solid winners of ours and generally the list was higher. Looking under the surface check out stocks like PCU, RL, DECK, MTW, GME, OSG, GOOG, RIMM, RCI, AAPL, DHR, that were all up nicely today, at or near new highs. On the down side there was little that hurt us badly, a few that dropped more than i'd like to see but that's ok becuase you can live with a few clunkers in a winning portfolio. The trick is what to do with them and how quickly. My main thought as we face a potential quarter-ending-window-dressing-meltup rally is that which stops working and starts to fade should simply be sold as we get into the July 4 mini break. Then we are playing slightly more aggressive stocks in a strong market but tolerating little weakness. Over the coming weeks we should build up enough cash that the next rebalance or unexpected opportunity will occur and we will be in shape to add at better prices. Nothing too extreme but enough to make the "trade" a good one. Bull markets reward mightily and also give the occasion blip that can be taken advantage of when you are playing with a lead.
So, we stay long the great stocks we have picked and expect good things but keep a foot on the brake pedal to manage the whole portfolio towards achieving our goals. More on that another time. Enjoy the gains!
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this newsletter (article), will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Geller Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current written disclosure statement discussing our advisory services and fees is available for review upon request.
posted by David Geller at 2:40 PM
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