NEW YORK ( TheStreet) -- Trend-following looks great on paper and in hindsight, but many investors find it difficult to pull the trigger and buy a stock that is trading near its recent highs. Having a plan for your entries and exits is what allows investors to succeed even when emotionally it may be challenging to execute.The opposite is value investing, or what many refer to as catching a falling knife. You can make money with either method, but I suggest you pick one or the other and stick with it. When it comes to investing, "Jack of all trades, master of none" types usually feed the masters. Oversized consistent gains are difficult enough with one method, and let alone trying to bounce from method to method. There is a sweet spot in trend following for the average investor; it's called buying on dips. Buying on dips is satisfying to many because "you're getting a deal" and at the same time you're still following the overall longer term trend.
Old Republic International (ORI) Background: Old Republic International engages in underwriting insurance products in the U.S. and Canada. Old Republic trades an average of 1.2 million shares per day with a market cap of $2.9 billion. 52-Week High: $11.35 Beta: 0.71 Price to Book: 0.77 BookValue: 14.40 Old Republic has made a new 52-week high in four of the last five trading sessions. Investors receive 71 cents annually in dividends for a yield of 6.3%. The dividend is at risk based on estimated earnings, but insiders are buying none the less. If a dividend cut was a serious concern, I would expect to see greater short interest. A highly followed stock like Old Republic is not about to be missed by the shorts. The short interest is minor and only 2.9%. Look for an entry price just under $11 to lower your risk profile. ORI Revenue Per Share TTM data by YCharts
LMCA), and there are more than five billion (yes with a b) shares in the float for a market value of nearly $18 billion. With $18 billion chasing earnings of $400 to $500 million a year, the upside is limited but still acceptable on a percentage basis. Look for a buying dip near $2.95 as an entry target. For the bearish thesis, the super-sized valuation has not been lost on the shorts. Short interest is near 10% and short sellers should not be ignored. That said, they are under pressure and underwater with the price at yearly highs. If shorts decide to say uncle and exit, they may push the stock price up even further if enough of them decide they had enough at once. SIRI Revenue Per Share TTM data by YCharts
At the time of publication the author had no position in any of the stocks mentioned. Follow @RobertWeinstein This article was written by an independent contributor, separate from TheStreet's regular news coverage.