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My Strategy

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By OnwardBound
August 4, 2005

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I have never been much of a contributor to any board, but following in so many people's footsteps before me, I want to attempt to write more to actively learn rather than passively reading as I have been. My DD is a sad state of affairs and I believe that in stating my strategy and analysis (what little there may be) will I measurably improve my ability and confidence in the stocks I hold. This I hope is a good place to state a strategy, as you all seem a friendly bunch. Not sure that other posts on stocks will belong here, for example the BMW method plays a large part in my portfolio so perhaps I belong there)

Now I suppose before stating a strategy it is good to know something about the person in question. I am 32 and have been dabbling in stocks for 10 years. Sounds like a long time, but amazingly, despite my interest and finance degree I developed little ability and no strategy. I haven't approached it with the seriousness it deserves. Here is my attempt to rectify that.

For me, time is more limited than I like as I am pursuing an MBA at Boston College while working full time, so it is important that I don't have to pay attention every day. On the other hand, I enjoy stocks and analysis and want to get my feet wet. I started a blog and it is amazing how good it feels to try to get this stuff out.

Okay finally onto my strategy.

I really have 3 strategies!

Strategy 1 and the largest part of my portfolio is based on the Shadow Portfolio at (American Association of Individual Investors) I like the idea that in microcaps better investments can be found because the professionals largely ignore the area because they are too small. The criteria for buying and selling are excellently laid out. The returns over the long haul have been excellent. (10-15 stocks here diversification important with microcaps and this strategy)

Strategy 2 is using the BMW Method to find gems. This requires more DD and so more time than the above. It is a smaller part of my portfolio and I view as the safest as the stocks are historically low and if my DD correct the price is only temporary. I hold stocks such as MRK, PFE, AVP, BUD, WMT, Doral, and MO.

Strategy 3 is sort of like TinkerShaw's Wall of Worry or Ed's (does anyone get to call him Ed?) Falling Knives post. I read posters such as them to get good ideas, then doing DD to understand what they are seeing and take a position if I like it well enough. Last year this was Elan, and Omnivision. Did extremely well with them. This year is Elan and looking at some others. (Recently discovered this board and the excellent posters here)

You can see it gets to be an awful number of stocks. I enjoy all 3 strategies and so far YTD up 10 percent. Not bad, but I am sure not as good as others out there. But perhaps I am becoming too "diversified" or not focused enough. Do others use multiple strategies in their portfolios? I want to work towards the bottom two. Although YTD I have done the worse in the BMW method, I believe it is a great way to find stocks.

There it is, thanks for your patience if you got this far. Now this weekend my homework will be to contribute something in a discussion of a stock, either a comment or a question counts. Baby steps, baby steps

Thanks for your patience.


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