Tuesday, October 11, 2005

flu bug,Columbus and the 1987 crash and more "kumbayah crap"

October 6, 2005

Hello,

So here we are in October, and we all know that for some confluence of reasons perhaps it the season of Halloween but the market always seems to get “spooked” in a big way the first 2 weeks and then rebound strongly sometime during the end of the third week and begins the year ending rally. The rally that follows the October drop follows a first in first out principle with many of the leading sectors regaining there step proceeding the sell off. The sell off is market driven bigger than any single stock and global in scope. I have noticed this annual occurrence since October 19th 1987. So while we search for the market bottom and in celebration of new discoveries lets follow the lead of Columbus and sail west to go east another words, instead of panic selling in mid October lets capitalize on the yearly reoccurrence by looking to pick up shares in leading sectors on the cheap and as they say buy low and look to sell high. So what you ask would Columbus do?

Well in 1492, Columbus sailed the ocean blue….first he had a plan to find a direct route to the east ,for most it is simply a matter of financial security ,but you have to have a plan,2) he had perseverance ,short term set backs were no match for his long term vision ,he new what he had to do and he kept doing it ,we call this follow up 3)Columbus was also well diversified using three ships instead of one ,one large and two smaller and faster ships, when one ran aground the other pick up the slack, your portfolio should work the same 4) Columbus favored using ‘dead reckoning” instead of the strategy of coordinating points based on the position of the heavenly bodies. Columbus believed in knowing were you were and taking direct measurements form that point to identify were you are now. Investors can use the same to track their portfolio and understand where they are and what it will take to get were they want to be, instead of focusing on the stars.

James

www.jamesfoytlin.com

1 comment:

Anonymous said...

Too much grappa!