[CANSLIM] RE: Controlling Emotions (was VRNT (was: Stop losses and DHI))

From: "Katherine Malm" <kmalm@earthlink.net>
Subject: [CANSLIM] RE: Controlling Emotions (was VRNT (was: Stop losses and DHI))
Date: Wed, 11 Jun 2003 08:00:22 -0500
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Hi Charley,

I think you hit on an important emotional control button, that is, focusing
on "your" stock means you miss the stocks that "could be yours."

I had a friend tell me that during the Bear, he
(1) Almost didn't realize that market was topping out because he was focused
on the leaders and his personal favorites like CSCO that didn't roll over
until late April or May. In the meantime, beginning in January, breakouts
were failing, fewer stocks were setting up, many former leaders were going
through blow off tops, etc.

(2) Almost didn't realize the rally in the Fall of 2000 was failing because
he was focused on former leaders and old favorites.

(3) Completely missed the move in homebuilders, commercial schools and
gaming stocks during 2001-2002 because he was focused on trying to pick up
old favorites and former leaders "at a bargain." None of the stocks from
these 3 groups ever crossed his radar, because his mining techniques didn't
use a consistent and unbiased approach to constantly refreshing his
watchlist with stocks showing strength and outperformance to the market.

(4) Fortunately, figured this out without loosing his shirt.

Now that he's figured all that out, he pays for my latte when we get
together!!

Katherine

- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Chazmoore@aol.com
Sent: Wednesday, June 11, 2003 6:30 AM
To: canslim@lists.xmission.com
Subject: Re: VRNT (was: [CANSLIM] Stop losses and DHI)


Well said Katherine. It is so easy to become enamored with a stock that
seems to be "yours". I suspect it has happened to most of us. We keep trying
to make it a winner when in fact it isn't. As we spin our wheels other good
prospects slip by.

It's more of that basic problem of controlling emotions.

Charley

- -----Original Message-----
From: Katherine Malm [mailto:kmalm@earthlink.net]
Sent: Tuesday, June 10, 2003 11:24 PM
To: Canslim@Lists.Xmission.Com
Subject: FW: VRNT (was: [CANSLIM] Stop losses and DHI)

Hi Tomas,
I realized in reading through my original response that I was rather sloppy
in editing. My apologies, as #7 was supposed to read "...because I want to
prove something..." rather than "...prove I was something..." I'm sure the
sentence ended up that way because I rewrote it a couple of times!
The question was really intended as a self-reflection to be sure there's no
emotional component to the decision to go after it again. I find this
helpful when I get stuck on something and can't quite articulate the reason.
99% of the time I have good reason to pursue something, but on rare
occasion, I find that it's not well-considered reasoning, and after
answering this question, will drop the stock from further consideration and
move on.
And yes, these questions would have to be asked in the context of stocks
currently on your radar. Assuming you have cast a good net, then VRNT can be
weighed in comparison to alternative investments.
There's no "right" answer to these questions, just answers from your
personal perspective.
Katherine
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com]On Behalf Of Tomas
Sent: Tuesday, June 10, 2003 10:53 PM
To: canslim@lists.xmission.com
Subject: RE: VRNT (was: [CANSLIM] Stop losses and DHI)

Katherine,
Question 4,5,6 may be hard to answer. If I add "in my
watchlist" at the end of those questions, then it is
easier to answer. My point is you are referring to
all the stocks I am monitoring on my radar, right? I
guess so, or else there's no point in asking those 3
question since there are always some better stock out
there that you don't know about.
1) yes
2) yea
3) same as alway (for loss, sell at 7-8%; for
win, depends on how the stock is doing).
4) hmmm, I think so... currently most of the stocks
in my watchlist is extended.
5) no, not in my watchlist
6) no
7) I don't think I'm being stubborn and I don't feel
like I have to prove anything with this stock. :)
This stock has very good fundies, if the technical is
right(market will go up), it is a good pick (IMHO).

Regards,
tomas
- --- Katherine Malm <kmalm@earthlink.net> wrote:
> Hi Tomas,
>
> Here are some questions you might ask in making this
> kind of decision:
>
> (1) If I buy it back, is it a low-risk entry?
> (2) If I buy it back, can I handle the price
> volatility that it typically
> displays?
> (3) If I buy it back, what will be my exit strategy,
> both for profit taking
> and for cutting losses?
> (4) Is this the best stock I can buy with my money?
> Or, would my money be
> better off in *any* other investment than this?
> (This is also a good
> question to ask when struggling with a sell
> decision.)
> (5) Are there other stocks that are either pulling
> back on lower volume and
> showing less volatility?
> (6) Are there other stocks, equally attractive, that
> are offering a low risk
> entry and/or a fresh breakout?
> (7) What is my real motivation for buying it back?
> For example, is it
> because I've answered all of the questions above and
> still feel that it is
> the best investment at the time? Is it because I
> want to prove I was
> something? Am I being smart or just stubborn? Etc.
>
> Questions like this force the trader to be
> completely honest within
> him/herself and make consistently wise and
> emotionless decisions.
>
> Regardless of your decision, there are times where
> it can take a couple of
> tries with the same stock to get it "right" and that
> is A-OK, as it is a
> compilation of factors acting on the stock all at
> the same time. On the
> other hand, sometimes when breakouts are whipsawing
> you one after the other,
> that's a sign that the rally may be wearing thin.
> One stock doesn't make a
> trend, but it's something to consider.
>
> Katherine
>
> -----Original Message-----
> From: owner-canslim@lists.xmission.com
> [mailto:owner-canslim@lists.xmission.com]On Behalf
> Of Tomas
> Sent: Tuesday, June 10, 2003 7:45 PM
> To: canslim@lists.xmission.com
> Subject: Re: Re: [CANSLIM] Stop losses and DHI
>
>
> VRNT is back to a little above the pivot point.
> Should I buy it back? Or should I wait for a few
> days
> and see what the market is doing. The market seems
> to
> be at a critical point where it is deciding if it
> will
> head north or south.
>
> What is the rule for buying back a stock that had
> such
> a big dip 2 days after the BO with big volume, but
> is
> now gaining back ground? Is the big dip a red flag
> enough to stay way from this stock?
>
> With this stock, I feel like I am currently going
> through a common mistake made by newbie.
>
> You experience investors better stop me if I am
> going
> to make a big mistake buying this stock back. :)
>
> tomas




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