Saturday, March 10, 2012

Beaten down sectors: steel, coal

I did a value oriented screen using the Schwab software. Quite a few steel stocks, coal and auto retailers and suppliers all made an impression. Value investing is a different animal from short term options trading. Value investors often look for beaten down stocks. Slow accumulation, buying 1/4 or 1/3 a position at a time, tends to be a good way to go for value investing. Stop losses based on price are not a good tool, more useful is doubling positions on steep dips.

For value investors, sentiment can be a useful tool in calling turns. Examples are stocks beaten down on what might be temporary news such as the Toyota recall or the BP oil spill. Calendar tendencies can help in terms of timing of buys.

These days I tend to keep this blog steered to reporting my short term trading activity, and don't report any long term buys or sells, or asset allocation decisions.

As always, I do not make recommendations to buy or sell. A person always needs to do their own due diligence before investing real money.

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