I have three questions:
1) You have had a lot of media engagements these days, which is great. The more people know about you, and the more successful you are (in terms of performance of your recommendations), the more subscribers you will have, I presume. Is there a point where your subscriber base (and other followers of your strategy) can become too big and it could make the strategy not work as well?
2) Portfolio management: I heard Gil only maintains 4-5 positions and Dr. K maintains 12-18 positions. But in the last few weeks (since 8/13), there have been at least 20 stock recommendations/alerts. You closed a few of them; and the ones you didn't send out follow-up alerts, I assume you still hold them. Personally I like to hold less than 10 positions. What's your suggestion as to how to manage my positions? Is it prudent to sell a stock that has gone up a lot: eg: ARUN and RVBD have gone up 19-20% since your alets; should I sell them and buy CYT and DTG? But that's against your philosophy, is it not? Or should I sell VMW and CRM which haven't performed as well?
3) I have been trading options when your recommended stocks have liquid options, which of course make the profit even more significant (I have small amount of capital of course). It seems to me that you mostly just trade stocks; is there any reason you prefer to trade stocks than options?
Answers:
1) Yes, that is possible, which is why we are, in a sense, 'married' to the markets. Day-to-day, we run our screens, do our research, and if the market changes in subtle ways that can affect our trading strategies, we take note and act accordingly. Incidentally, I discovered the pocket pivot after the markets had moved in a sideways, grinding fashion in 2004 and part of 2005 since base breakouts werent working well.
Another example of staying on top of things: In the late 90s, some dot.com stocks such as amazon.com had no earnings. The C and A in CANSLIM are all about earnings. So I created a subrule which allowed me to buy stocks with no earnings provided they had robust sales.
2) Our service Follow The Stock discusses all buy, pyramid, sell, and short points in the stock. Our service Pocket Pivot Review primarily discusses buy points in stocks. On occasion, we may suggest a pyramid point or sell point in the stock, but it is up to each investor to determine their sell points based on their own risk profiles and time horizons, ie, some prefer swing trading, some prefer intermediate term, and others are even longer term holders.
In terms of how long you should hold a stock, you could sell out your weakest name to make room for a new stock that is showing bigger potential if you have no additional buying power. We recommended CYT on Friday during market hours, and was up 5.7% today, so one could have acted on CYT before the close, or at today's open of 51.64. In general, we would not advise selling a stock that is acting well. The big money is made in catching the handful of stocks that continue higher and higher.
3) We prefer stocks. Options have more slippage, though if the account size is not large, slippage is minimized. We advise anyone who trades options to understand the additional risks and position size accordingly.