Much to do today, so let's get moving!
First things first: the response to both my recent
Cutting Room column and my
Monday column was overwhelming, and I am most appreciative. If, by chance, you did not get a return email, know that I am most grateful for any flattery you threw my way. And, in the case of Monday's column, the top 10 Prom Queens are being rounded out, and the official announcement will come Feb. 21. We'll have a lot of fun with that.
Next up, some coming attractions: This Friday night, I will be in Gotham, where Gary Schreier, most excellent producer of "TheStreet.com" on
Fox News Channel
, is allowing me to a) appear live with the big boys, and b) be on every segment. So, if you can, tune in Saturday morning, for -- no doubt! -- the best "TSC" show ever. (Honestly, I think this will be way better than that boring "Who Shot J.R.?" episode!)
Then on Saturday morning, I will be doing a 90-minute
song and dance at the
Online Trading Expo
. If you can, please stop in and say hello.
Further down the road, I will not only be on vacation, but my dear wife Nancy has found a way to keep me away from the keyboard: We'll be taking a cruise, where my only responsibilities are to eat roughly 19 times a day -- before dinner is even served! -- and "catch rays" on the pool deck where I'll be identified as "the funny looking albino guy sitting under the umbrella with towels covering 99.9% of his body!"
I tell you all this, though, because, well, I am sincerely hoping you'll do the right thing and send my wife and me a bon voyage bottle of champagne. More important, though, I don't want you to get Gary B. withdrawal. Yes, that week there will
be five GBS columns. And, not just any GBS columns, but a column for each day of the week, profiling five trades I made each day starting Feb. 14, my thought process behind each trade, my entries, my exits, etc., etc. Want to see if I'm any good? So do I! So, look for those columns, but not for me, the week of March 6.
OK, enough about the future, let's jump to the present. First up, I received an interesting note from astute reader
: "Maybe you can talk about safety valves. Stuff like stocks that didn't go down on Jan. 3 or this past Friday
Christy brings up an interesting point, and one I wanted to pursue, because any day the market gets throttled is always an excellent time to look for new longs. Why? Because anything that went up that day, instead of down, is obviously a solid port in the storm. Even better, find stocks that either made new highs or reversed a downtrend. Those usually turn out to be terrific opportunities. As an example, here are two I liked this Monday
Feb.14 morning, both of which I was long when I put this column together.
Next up, a note from reader
, who I suspect was a bit irritated with me:
Gary, Your response last week about Quintus (QNTS) at 32 was totally wrong! After listening to what you said about getting out of the stock, I did sell 100 shares that I bought on the IPO. Immediately following my sale at 32, it proceeded to go to the 50s. Answer: Even the charts do not always tell the story -- Peter Lehman
Well, I don't know what to say about that one, other than, "Peter, you're right." Charts most certainly do
always tell the story. Or at least the whole story.
The moral? You will get the charts wrong. You will get the charts wrong a
. So, knowing that ahead of time, what should you do? Repeat after me: Have an exit strategy. In other words, always be prepared to say, "It galls me to admit I was wrong, but indeed it looks like I am. Therefore, since XYZ hit my bailout point, I will close my position. I will be ticked off, of course, but I will close my position."
, showing that he is a close follower of both my columns and the show, wanted a follow up to my
trade. If you recall from both the "TSC" TV show and my
follow-up column, I was long the stock at the bottom of the gap up. How did it turn out? Let's have a look.
On a different tack,
sent this my way:
Gary, I understand that nobody asks about boring companies anymore, but a lot of people who work for those boring companies (like me) are sitting on stock options we were given as part of our overall compensation package. I'd sure appreciate it if you could take a look at Delta Air Lines (DAL) - Get Report and see if there is much more downside in the stock.
Bill, point well-taken, and let me go one step further. I have a very good friend who is a pilot for
, and he has expressed similar concern for his options. Therefore, let's look at both stocks.
Finally, if you read me, you no doubt read the big guy,
. And, I must say, Jim has been on a roll recently, taking on the value community. But what I'm really getting out of his writing lately is the fact that he is
willing to change
. Sure, you can throw that into the "Church of What's Working Now." But even so, so what? You simply have to change and adapt in order to take advantage of what the market gives you. That's why I'll be giving close study to his upcoming biotech rotisserie league. Why? Because that's where the action is. And where the action is, is where breakouts happen!
Now, Jim gets enough praise and that's not my intent. No, my intent is to draw a contrast with
The Motley Fool Rule Breaker Portfolio
. Now, I have to say, I was both in awe of it and frankly envious of it for the past few years. But I looked recently and saw it was in the red this year. And upon further study, what did I find? That it's still populated with basically consumer Internet companies. I'm still seeing
is still there. So are
So, my thought was, great, those were huge winners ... a few years ago. And maybe they'll be huge winners in the future. But, they aren't what's working now. I mean, where are the
? Certainly no
or even an
Now, in their defense, they did add
in December, which has proven to be a huge winner. And they have had
for a while, and that's worked out nicely.
Still, the portfolio strikes me as sort of a technological
, loaded with all of
Now all this is not to say drop everything, constantly churn your portfolio and only buy a stock that's made a 52-week high. However, what it is saying is to keep current, whether it's with TA or fundamentals or "what's working now."
Anyway, something to think about.
Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. At the time this column was written, he was long Wink Communications and Agile Software, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes five technical analysis columns for TheStreet.com each week, including Technician's Take, Charted Territory and TSC Technical Forum. While he cannot provide investment advice or recommendations, he welcomes your feedback at