Gary B. Smith Chat on Yahoo!

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Gary B. Smith chatted on Yahoo! April 13 at 5 p.m. EDT.

TSCEllen:

Hey everyone and thanks for coming to today's chat with Gary B. Smith! It's been a very exciting couple of days so let's get started.

digby_dawg asks:

Intel dragged down techs today, any other companies also at risk?

gsmith4:

Well, it looked like a lot of Net stocks got hit. So...those are ALWAYS at risk, I guess.

bz624 asks:

How do you handle stocks that rise or fall in sympathy to another company's news?

gsmith4:

If it's just one specific sympathy stock, I generally won't trade that. If it's a whole industry, I figure something is endemically wrong, and WILL trade those.

vantomb asks:

Gary, how do we deal with the feeling of being left behind in the Internet stocks, maybe forever?

gsmith4:

Actually, I'm going to write about that on Monday. But, here's what I do: content myself with "just" banging out 50% years!

Alakazam_21000 asks:

WHAT ABOUT THOSE PESKY TAXES?

gsmith4:

Here's my strategy: I'm not paying this year!

trapper_james asks:

Hi Gary,What do you see in the short term for small caps?

gsmith4:

I had a chart on the Russell a few days back. Think they're going up!

John_in_cal asks:

Hello Mr. Smith. Are you worried about this latest trend in stocks and how can it effect the internets?

gsmith4:

Latest trend? You mean the fact that if it's .com it automatically goes up!

hermpsm asks:

Why on a lot of the charts you don't look for high for the year?

gsmith4:

I used to, but found I only needed a break from congestion to get my 5% gain.

jkcfp asks:

Hello from Karin

gsmith4:

Hi Karin: our resident Texas Swim Mom!

ghillct asks:

Gary, I've noticed you've increased your minimum avg. volume to 300k is this because of increased lot size or performance?

gsmith4:

Increased Lot size. I don't know if that's good or bad, btw!

jkcfp asks:

Gary, what do you think of Intel's dropping in Instinet?

gsmith4:

You know: probably meaningless. What really matters is where it trades tomorrow! Lot of fakeouts on the Instinet.

bernard155 asks:

How old are you?

gsmith4:

41 and holding!

rajah138 asks:

If GBS strategy is superior to buy and hold, why have any IRA money in mutual funds, etc?

gsmith4:

Great question: I just pulled everything out of 401K's etc. No doubt, marking the top!

John_in_cal asks:

Oh wise one, is there a internet stock left that is a good buy?

gsmith4:

Yeah, there's a few I was looking at: Geek, Seek, etc. Also, there's a lot that have to go through some ups and downs: ivil, etc.

BlahBlahDah asks:

What is the technical outlook for PTEK?

gsmith4:

Wow, had a huge day today, but then pulled back. Probably up more in the next few days.

John_in_cal asks:

What sector represents a good opportunity in the market right now?

gsmith4:

Other than Internet? I like Paper products ironically.

Billyob123 asks:

GBS! I Just got TC2000! Did you find it difficult to "learn to use" the software at first? Any tips?

gsmith4:

No, pretty straightforward. See my archived colums for how I use it.

BlahBlahDah asks:

Do you have any take on the technicals on LPGLY?

gsmith4:

Yeah, if that stock doesn't pull back, there is no justice!

jkcfp asks:

Still looking at that IBM thinkpad, it just got cheaper too, you still like yours, right?

gsmith4:

Yep, love it!

Pimpking24 asks:

What do you do for a living, in your own words?

gsmith4:

You mean what do I tell folks? I generally tell them I'm a writer. And lately saying I write for

TheStreet.com

even gets a knowing nod!

qbt111 asks:

According to GBS strategy how would define "perfect congestion"?

gsmith4:

20 to 25 trading days with multiple touches across the resistance line.

John_in_cal asks:

Does the latest new with Intel represent a buy for the stock?

gsmith4:

Looks better as a short, frankly.

vantomb asks:

Gary, Have you and Wesson made any major new adjustments to your scans?

gsmith4:

Nope, actually we're refocusing on the old classics. Strayed just a bit for a few weeks. Not a good use of time.

ghillct asks:

Gary, do you always stick to your discipline, I mean what if your short TYC and only an eighth of a point from hitting your profit target and then Barron's decides to write it up as if it's GE in the making. Don't you get the itch to cover?

gsmith4:

The itch? Yes. But, I've learned not to second guess myself. If it gets stopped out so be it. Out of thousands of trades I do, they all balance out!

gsmith4:

As an example, I DID NOT cover G when it was close and got the benefit of a nice gap. So, it pays to be patient.

hermpsm asks:

Do you still look at IBD to find stocks in black?

gsmith4:

I have not used IBD in almost a year.

njf82 asks:

How do you like working at

TheStreet.com

?

gsmith4:

Well, actually working for

TheStreet.com

since I don't actually go there. But, I really love it. They've treated my like a pro since day one, stupidly on their part, but I'm not saying anything!

jkcfp asks:

What do you think of VDAT? I am long.

gsmith4:

Gee, it's only tripled in the last few days. Well, I might want to take some profits, but I'm always getting these moonshots wrong.

Canman169 asks:

Is CPQ a good buy at these levels?

gsmith4:

Yeah, actually, I can see a potential bottom there. But, not really my style.

Neve_21 asks:

What is IBD?

gsmith4:

Investors Business Daily.

ppdn51a asks:

Does GBS require a close above congestion or the high for the day above congestion?

gsmith4:

A close above congestion.

John_in_cal asks:

Can you give us your 5 best "buy" picks?

gsmith4:

Impossible to say, since I don't know your time frame. Sorry.

hermpsm asks:

Do you make your moves strictly on TC2000 information and your discipline?

gsmith4:

Yep, pretty boring, huh?

Pimpking24 asks:

How many computer do you have in your home and work place?

gsmith4:

6...and we're thinking of adding a raised floor! (tech geeks, you can laugh now.)

jkcfp asks:

I am tempted to buy TERN again. What do you think?

gsmith4:

A nice breakout today Karin. But a bit "v" ish for me. An "okay" pick.

qbt111 asks:

Out of all the technical indicators, which one is your favorite and why?

gsmith4:

Volume surge if I had to take one to a desert island.

nixnux asks:

What did you mean by stating that your "refocusing on the old classics?"

gsmith4:

Oh, we're farting around with some special scans. But, they didn't work any better than the normal stuff. So back to the basics!

njf82 asks:

What are the criteria that make a stock "good" to invest in?

gsmith4:

Invest? That I never do? Trade? See my long columns in the

TheStreet.com

archives.

Birbal13 asks:

What's you opinion on NTAP?

gsmith4:

Another new high today. Looks just a bit extended, so I'd wait for a pullback.

Billyob123 asks:

Gary, do you place orders during market hours or simply enter your orders before the open?

gsmith4:

I send my orders in before the open, but my broker places them in the first few minutes.

jcgosu asks:

What do you think of OMKT?

gsmith4:

Now that's at least a reasonable looking internet stock. If it breaks to 17+ could be a big winner.

ppdn51a asks:

You have said that you average a 70% win rate on longs. Does this take into consideration trades that you close because they have been open over 30 days?

gsmith4:

Yeah, but those are very infrequent. BTW, it's 20 days now.

tuna1212 asks:

Where did you get your glasses?

gsmith4:

These specs are Giorgio Armani's. I hope he doesn't miss them!

bbigsby asks:

Hey Gary, loved the GBS Yahoo! thread review! Your "one size fits all" stops worry me. Wouldn't you be better off with volatility-based stops?

gsmith4:

Perhaps, but very difficult to compute, and even harder to backtest.

donkan7 asks:

How come you give away your trading secrets. They'll stop working if many people adopt them, won't they?

gsmith4:

Yeah, you'd think so, but you know it never turns out that way. In fact, see my column of this past Wednesday for more thoughts on that topic.

njf82 asks:

Do you think there will be a correction in internet stocks?

gsmith4:

At some point in the millennium? Well, you'd think so!

vantomb asks:

Gary, great columns recently on "Rules for going long and short" (thanks for the great work), Do you find yourself getting a little nervous about going long on some of these expensive stocks?

gsmith4:

Thanks for your nice comments. Worried? No, not really. My risk is so low on any one trade, I'm generally not bothered unless it's say a $200 stock.

hermpsm asks:

Do you still insist on 150% volume increase over prior day?

gsmith4:

Yep. Ironclad rule.

Tar_Heel_Maniac asks:

What does TSC stand for?

gsmith4:

The Street.com

!

jkcfp asks:

Noticed all my scans come up with V pattern stocks, Internet pattern?

gsmith4:

Yeah, I've noticed that too. I pass on those. Just too risky.

bbigsby asks:

My stop losses should be what % of my total equity with something like GBS?

gsmith4:

If I get stopped out, I lose about 1% of my equity. Many times not even that much.

goldiesacks asks:

What are your thoughts on AOL?

gsmith4:

As a company: a juggernaut. As a stock? Moving sideways, and probably looking to go up...Again!

bbigsby asks:

Do you want do what you joked about on April 1st?

gsmith4:

No, No Way! Who needs the headaches?

AZWaterMan asks:

Tech stock valuations are so high. How does a value investor find opportunities in the tech sector, and what investment criteria should be used?

gsmith4:

Honestly, and I don't mean to be flip: I'd either forget about being a value investor or be prepared to sit out the market for a bit.

John_in_cal asks:

Do you think brokers will be a thing of the past with all the Online Sites? What should the single investor know about these types of investments?

gsmith4:

I think brokers will go away when supermarkets go away. Like never!

BlahBlahDah asks:

Judging by the past couple of days, is the long awaited small-cap resurrection here?

gsmith4:

Yep: And, humbly, I called it a week ago.

balloonsacs asks:

How are the averages this year - long and short?

gsmith4:

You mean MY averages: as usual, I'm killing it on the shorts: about about 66%. Overall, not too bad.

njf82 asks:

What do you think about the Net Ipo's?

gsmith4:

Honestly: totally idiotic. But, I'll reserve judgment until

TheStreet.com

and my wife does their's respectively!

qbt111 asks:

Can you describe the market psychology at play behind a breakout?

gsmith4:

In 10 words? Folks feel it's okay to now buy at a higher price.

ppdn51a asks:

Is the 20 days for shorts also?

gsmith4:

Yeah, that's a good guideline.

jkcfp asks:

Gary: Georgio's? Did Nancy buy them?

gsmith4:

Are you kidding? If I'm wearing ANYTHING that looks halfway decent she bought it!

hermpsm asks:

Do you like gaps up on volume?

gsmith4:

Love 'em.

vodkamartini6 asks:

Gary, do you know Todd Shaver of The Bull Market Report?

gsmith4:

I read exactly one newsletter: the Drach Report by Robert Drach. So, don't know Todd.

trader1949 asks:

How do you trade net stocks that are practically vertical, but show good volume every day?

gsmith4:

Here's the sad part: I don't!

jcgosu asks:

What is your opinion on ECHO?

gsmith4:

Hello? Hello? Hello? Hah, a small joke. No, the stock still looks weak to me.

bbigsby asks:

Do you ever pair-trade? Or does that pollute the system with fundamentals?

gsmith4:

No, I keep my method pristine!

John_in_cal asks:

By your answer to the correction of internet stocks, I take it that you do not see it coming anytime soon?

gsmith4:

No, I wouldn't say that: in fact they all looked pretty weak to me today. In that segment NOTHING surprises me, either direction.

kewgardens98 asks:

Do you think CSCO is a good stock?

gsmith4:

Good stock? Yes. good trade right now? Maybe.

accom asks:

Gary, what's the reliable moving average to determine entry and exit point?

gsmith4:

I don't use moving averages, sorry.

BlahBlahDah asks:

Did the recent slide in the health-care software stocks hit bottom? CERN, for instance seems to bounce back to its prior levels whenever it takes a hit.

gsmith4:

Let's put it this way: I hope not, since I'm short WLP!

chelsea_18_f asks:

How did you come into this career and who were your role models who lead you there? By the way, I just love your work!

gsmith4:

Thank you. I came to

TheStreet.com

via

Sports Illustrated

. As for my role models, in writing I think

Rick Reilly

of

SportsIllustraded

is absolutely the best. As for trading, I try to trade like

Ed Seykot

(read Market Wizards) In general, though, I just try to work as hard as my wife!

bbigsby asks:

Do you worry about burn-out? Or did you build GBS to be your Perfect World?

gsmith4:

Well, I did build GBS to be able to trade for a long time. But, yeah, I worry about burnout. Not often though.

Kevin1952 asks:

What is driving the recent rapid increases in Safeguard Scientifics (Nasdaq, SFE)?

gsmith4:

Boy, wish I knew. It must have entered some Internet index somewhere!

all_or_nothin asks:

Great article on

Duval

in

Sports.Illustrated

., I actually enjoy your golf writings as much as the technical analysis. Thanks. P.S., Your making me some money.

gsmith4:

Uh, well, I hate to say it. but that's a different Gary Smith who wrote that Duval column. He's a good ole Southern Boy, and I'm a damn Yankee!

maxxineee asks:

Will CYTEC IND. blow away estimates Thursday?

gsmith4:

Oh, I'm glad you asked, because the CEO just called and said.....whoops, he hung up on me!

BSAFrank asks:

How do you feel about on-line brokers. Is it the way to go?

gsmith4:

It depends which one, of course, but overall, I think they're here to stay.

angel_23220 asks:

Hi Gary, any thoughts on IDX?

gsmith4:

Looks like it wants to head back to $10.

vantomb asks:

What do you think will be the bandwidth winner: cable or dsl?

gsmith4:

Toss-up: See Jim Seymour's excellent columns on this topic.

Pimpking24 asks:

Do you think the world will end in the year 2000?

gsmith4:

Yes, most definitely. That's why I'm not paying next year's taxes!

njf82 asks:

How often do you see Jim Cramer, and what do you think of hedge funds/managers?

gsmith4:

I have seen JJC exactly once, so I'm guessing he's avoiding me! As for hedge fund managers: more power to 'em!

ehrler2 asks:

Do you foresee an imminent price decline of the Internet stock high flyers?

gsmith4:

Imminent? No way of telling. In fact, everytime I think they're going to go down, they go up!

ppdn51a asks:

Please clarify your volume criteria.

gsmith4:

I look for 150% of the 50 day ma of the volume as my breakout criteria.

accom asks:

Could you please explain how a point and figure chart works?

gsmith4:

I cannot. I'm totally ignorant on the topic.

malcolm88 asks:

Gary, your thoughts on YHOO, short and long term?

gsmith4:

I like it as long. Would love it if it broke the $220 level.

njf82 asks:

What do you think of the new proposals for markets to be open longer?

gsmith4:

Meaningless. Most folks won't want to trade much longer than 9:30 to 4.

psycho_trader_68 asks:

Gary, any opinion on NETE?

gsmith4:

Nice pullback form its recent high. Looks like it has more left in it.

Kevin1952 asks:

What is the long term growth potential of Rambus, Inc. (Nasdaq, RMBS?

gsmith4:

Get out the casket.

vantomb asks:

TGO looked like a good short for today, how does the chart look to you?

gsmith4:

I had it as a short. Got stopped out, so my eyesight must have been bad!

lloydc34 asks:

Do you ever let option activity influence your decision making process?

gsmith4:

Never.

BlahBlahDah asks:

What is the logic behind the accepted notion that "when most people expect the market to go lower, it actually moves higher" or vice versa?

gsmith4:

When "most" people think it's going lower, they've already sold. Therefore, even a little bit of buying raises prices. And...vice versa.

pupsiclenhita asks:

Your interpretation of Lucent and EBAY charts?

gsmith4:

Lu doesn't look so bad. A nasty spill but right back at its breakout. Ebay also hovering near its breakout;. Both look fine.

trader1949 asks:

Are you looking at the drillers yet Gary?

gsmith4:

Nah, I'm done with them. Back in congestion for the time being.

jcgosu asks:

What is your volume rule, please explain?

gsmith4:

See above.

Regulatin_Styles asks:

When might things pick up for DELL?

gsmith4:

A pretty gruesome looking chart. It has to take out $46 again, and that's look far off for awhile.

Billyob123 asks:

GBS, do you ever scrap your 5% rule and trail a stop to ensure at least 5% gain?

gsmith4:

No, tried it, but always face the tough question? When do I move my stop up?

angel_23220 asks:

PROG looks interesting. Any thoughts?

gsmith4:

Yeah, it does look interesting. But I'd still pass as a long.

accom asks:

Please tell us your favorite sectors for short/long trading right now.

gsmith4:

Actually, there's really nothing short that looks good. On the long side, I like boring paper companies.

JCanti asks:

Gary can I have a opinion on ORCL and CUBE?

gsmith4:

Orcl looks nasty. I wouldn't buy it here. Cube looks like it want to drop further. Both are pretty ugly.

dianadel asks:

What is your opinion about the Internet Fund, as an investment, as opposed to individual Net positions? I have both but am tending to feel like the "Fund" is safer!

gsmith4:

Well, if the Interent stuff drops the funds won't be any safer: heck they all own the same darn stuff. I think a year from now, there will be a lot fewer internet funds.

AA8976 asks:

What do you think of TUNE? Do you think it will SHOOT up anymore?

gsmith4:

Honestly, if there is ANY sense to this market, it won't!! Which probably means it'll go to $1000!

vantomb asks:

ELNK, was in one of your recent columns, and you liked it as a potential short. Did you go long when it broke to the upside?

gsmith4:

No, but only because it was too volatile. But, certainly a good long trade.

malcolm88 asks:

What do you think of the Market Wizard books?

gsmith4:

Terrific books. Two of my favorites.

bbigsby asks:

Can

Dave Kansas

and the gang keep

TheStreet.com

going if

Jim Cramer

falls off the face of the world?

gsmith4:

Hey, I alone attract at least 22 readers a day!

malcolm88 asks:

Do you think DJIA and Nasdaq will move further up in the following days/weeks?

gsmith4:

Yep, that's my guess.

qbt111 asks:

Great column; is NETA a good short?

gsmith4:

I wouldn't. Has already fallen too far.

njf82 asks:

What do you think about telecommunications stocks?

gsmith4:

T is looking ho-hum. Many of the others in the same boat!

zero_toleration asks:

Hi Gary , I am thinking of starting to get involved into the stock market. Do you have any advice?

gsmith4:

Yes, go back to my very first column and start reading. Your first quiz is next week.

jkcfp asks:

Gary, we would like you to visit us at the GBS club one evening!

gsmith4:

Yeah, I might do that! Hope you can afford me!

TSCEllen:

Thanks everyone for such great questions and thanks Gary for being with us!

gsmith4:

Thank you, Ellen, you're usual terrific job. Thanks to my daughters, Katherine and Diana who manned the charts tonight. And thanks to all of you for some terrific questions!

TSCEllen:

Remember to look for the transcript at www.thestreet.com. If you'd like more info about TSC/Yahoo chats, send email to chats@thestreet.com.

TSCEllen:

Make sure to look for Gary next month!