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Paul Johnson

 
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  • Miss Some Of The Current Market Rally? There Is Hope [View article]
    I understand, and you touch on an important point, and that is that your emotional balance is very important in trading. That's why, as the previous person was mentioning, you need to find a style that works for you and that you can stick with. The most important thing is the quality of stocks you invest in or trade. Are they top-earners, say, as rated by Investor's Business Daily or some other source?
    As for when to buy them, I buy them only when they break out or bottom out (reversal trades). I swing trade (trades that last from several weeks to several months or longer) simply because I don't like worrying about how my stocks are doing in bad markets, because I'm in cash. I can go off and enjoy myself. Then, I wait for the dust to clear and ride them right back up again. Call me a "sore loser," but that's how I roll. The other reason for investing in or trading leaders (and why I mention that traders should monitor their strength/health daily) is that they are like canaries in a coalmine. Their strength/weakness tips you off as to whether the big institutions that hold them are feeling good about things or not so good. If you think swing trading is for you, I'd suggest maybe paper trading or trading in smaller increments until you feel comfortable.
    If you want to go the buy-and-hold route, I'd look for leading companies that offer generous dividends. Hope this helps! Best, PJ.
    May 25, 2013. 10:31 AM | Likes Like |Link to Comment
  • Miss Some Of The Current Market Rally? There Is Hope [View article]
    I absolutely agree with you. Not only do you have to settle on a particular investing/trading style but it has to fit YOUR circumstances, not someone else's. In considering this, you might want to take into account your age, the level of risk you feel comfortable with, how much money you have to trade/invest, the amount of time you have available to manage your trades/investments, your level of interest etc. My article was pretty much directed at traders, and specifically traders that only now are considering stepping up their involvement, that's why I'm talking about monitoring the strength of the leaders and the market indexes on a daily basis and keeping abreast of market-moving events. Along the lines of what you mentioned, I believe trading is a "confidence game" and keeping track of where leading stocks and the market stand along with potentially market-moving events acts as a barometer that provides you with the confidence you need to overcome that indecisiveness. Great discussion, thank you for your thoughts!
    May 25, 2013. 09:51 AM | Likes Like |Link to Comment
  • Miss Some Of The Current Market Rally? There Is Hope [View article]
    Thanks for you comments, but this article is intended more for traders (especially swing traders) than "buy and hold" investors, which you seem to be. Why do I feel that swing trading-- which is more along the lines of William O'Neil's style of trading-- is better? Because you miss the market corrections that happen at least two or three times a year AND you miss down cycles in top quality stocks. Let me give you an example. Say you bought Apple (AAPL) at $456, which was its price at the end of 2012, and you rode that stock all the way up to nearly $700 share, but continued to hold it even when it ran into trouble. No need to keep an eye on it, it's a "wonderful company." Well, right now you'd be losing money on it, because the stock's at around $444. Now, let me ask you, wouldn't you have been happier jumping out of Apple when it ran into trouble? By swing trading it, you wouldn't be sitting on a loss or having to wait for the stock to appreciate $256/share just to get back to where you were! That's a wasted use of time and money. Remember, even well-run, "wonderful" publicly-held companies get into trouble periodically, and in my opinion, you are far better off reallocating your money to the stocks of companies that are clearly are on the rise. By the way, nobody said you have to watch a top stock "every hour, every minute." But paying attention to your investments is only smart trading AND smart investing. Again, say you ignored Apple for a few weeks as many people did?

    Now, if you're in the fortunate position of having a lot of money, and don't want to be bothered with closely managing your investments, dividend stocks might be a good idea, but your returns-- even with the dividends-- won't match the price appreciation of most leading stocks.
    Go to my site and take a gander at some of the returns.
    May 24, 2013. 03:53 PM | Likes Like |Link to Comment
  • Miss Some Of The Current Market Rally? There Is Hope [View article]
    This article may seem general, but as publisher of Stock Confidential you'd be surprised how few traders pay attention to the basics I've indicated above. There's a big difference between knowing what to do and doing what you know. Traders just starting out this far into the bull market are not sitting on the profit cushion other traders have, so there's a much thinner margin for error. Thus, they need to trade in a very disciplined manner. Anyway, thanks for your comment. : )
    May 24, 2013. 02:48 PM | Likes Like |Link to Comment
  • Miss Some Of The Current Market Rally? There Is Hope [View article]
    Hmmm, doesn't sound real scientific, but hey, thanks for you idea. Best, PJ
    May 24, 2013. 02:40 PM | Likes Like |Link to Comment
  • Miss Some Of The Current Market Rally? There Is Hope [View article]
    All of us have our own character foibles and personal demons, but his strategies, wisdom, and psychological approach to the market are still in use by top traders today-- including William O'Neil and many others. I'd suggest reading "Jesse Livermore World's Greatest Stock Trader," if you haven't already. For traders, it's a very interesting read. Best, PJ
    May 24, 2013. 02:39 PM | Likes Like |Link to Comment
  • The End Of The World (As We Know It) Or Resolution To The Fiscal Cliff? [View article]
    I don't try to predict markets, but rather react to what they're telling me. Right now, this market is telling me it's extremely oversold and that any resolution might bode well, but it's a news-driven market, too, so anything goes. Ultimately, it appears logical that the market will rebound big time on a serious resolution to the fiscal mess. Thanks for your comment. PJ
    Nov 19, 2012. 09:08 AM | Likes Like |Link to Comment
  • Want Bigger Profits? Swing Trade Less! [View article]
    Thanks for your comment Mohamed, I assume you're talking about ETFs. For me, the decision as to whether to trade ETFs or quality stocks is best determined by how much effort you want to put into your investments. But holding them "forever" doesn't make much sense to me anymore than you "buy and holds" a particular stock-- that is, unless you want to be a passive investor. ETFs are only as good as the market index or basket of stocks or commodities contained in a particular ETF, and let's face it, just like stocks, sectors fall in and out of favor, and indexes go up and down. Yes, it's difficult to time the market these days, but in no way impossible. Today, most ETFs are getting pounded just as any stock is. Me? I'm out of the market completely. I favor trading only a select group of top earning companies and I only buy them when they break out of proven chart patterns, or when they bottom out, and they can rack up much bigger and faster returns than most any ETF I know of. Following individual company stocks gives you the opportunity to get to know them, You learn about their earnings track record, how the stock tends to move, etc. versus a whole basket of stocks. But you need to have the discipline to trade them only during strong uptrending markets.
    Jul 23, 2012. 10:31 AM | Likes Like |Link to Comment
  • Want Bigger Profits? Swing Trade Less! [View article]
    Thanks for your comment! I agree with you about shorting, but I'd say it's a worthwhile strategy only at market extremes-- namely when stocks are WAY overbought. I don't see trading as gambling, though-- not if you chose the right times to trade and avoid choppy markets like the one we're going through right now. News-driven markets defy almost every strategy. When there's a solid upturn in progress with clear leadership, however, I make a lot of money trading top quality (earnings growth) stocks that are breaking out or rebounding. Most traders don't have the mental discipline to stay out of the market when things are they way they are now. I'm almost completely in cash right now. You need to be highly selective of the times you trade and know when to pounce.
    Jul 23, 2012. 09:10 AM | Likes Like |Link to Comment
  • Want Bigger Profits? Swing Trade Less! [View article]
    Thanks for your comment, Joe, I agree. In the absence of any market leadership, it's always best to turn to defensive issues-- especially with all the challenges before us for the European and U.S. economies. One of my favorite things to do is spot top quality stocks (strong earnings!) that are in the process of bottoming out. I find candlestick charting helps a lot.
    Jul 23, 2012. 09:00 AM | Likes Like |Link to Comment
  • Want Bigger Profits? Swing Trade Less! [View article]
    Yes, certain option trades make sense, but "most" traders in dicey markets can and usually do eventually lose their shirts trying to short the market. I've seen even top traders (and I won't mention any names) lose BIG trying to short. That's why you don't hear people like Wm O'Neill and others touting its virtues. There's also the psychological component. For "most" traders, taking time off to build their watch list and protect their emotional capital is paramount, inasmuch as the stress of trading can an enormous toll.
    Jul 22, 2012. 09:09 AM | Likes Like |Link to Comment
  • Cramer's Lightning Round - Hudson City's Fine Hermance (11/19/09) [View article]
    Couldn't disagree with you more. That this stock came back from an over $70 deficit so quickly (after announcing its sales were no longer in the triple digits) is indicative of the interest in this stock. Shook out a lot of holders, apparently including yourself. At this point it remains near its highs. Mark my words, it'll move substantially higher.
    Nov 28, 2009. 01:34 PM | Likes Like |Link to Comment
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