Wednesday, March 01, 2006

Heavy Equipment (when to chase)

Strong moves in this sector, with stocks such as DE (Deere), CAT (Caterpillar) with good gains. Steel stocks such as NUE (Nucor), OS (Oregon Steel), X (U. S. Steel) are also strong. A look around to their competitors, finds that most all of these stocks have already moved.

Earlier in the year, I owned CMI (Cummings Engine) and sold it for a small profit. Now it looks like it is hard to get back in, at much higher risk and higher prices.

It is a tough call, when to chase, and when to let it go. I'd say 80% of the time, it is better to let it go and find something that is lower risk. If a position is taken, a small position with the intention to add more on a good pullback is often the easiest tactic.

A person can ALWAYS find stocks that would have produced good gains. The advantage of 20-20 hindsight is one that Internet stock gurus often have, but not me. Readers know who I am talking about, those traders that report that they bought at the low and sold at the high, every time. These guys/gals are a riot.

Cheers.

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