Desperation Investing – Don’t Do It!


I have a question for you.  I know this isn’t an investment style that you
will support.  However, I am desperate here to make my money back quickly so
that I have a cushion for investing again.  I wanted to research the success
of the strategy of buying New America stocks the day or eve of their debut
and selling after a small run-up.  I’ll only invest in the ones that seems
good and have a great write up.  I’ll buy 1000 shares and just let it go a
little and sell.  I am going to look at the New America Archives and see
what the activity for the day is and what kind of success rate I would have.
What do you think.  I hope you don’t think it is ridiculous.  It’s just when
I get the CANSLIM breakout reports I am always nervous that they have run up
too much and that I am late getting in.

My Response:

I wouldn’t recommend buying stocks just because they appear in New America,
although some research to see how that strategy would have done would be
interesting.  Buying at the right time is critical.  You need to be careful
about trying to make a ton of money right away.. it leads to mistakes.
Being patient and waiting for the best companies to flash a buy signal is
always the best policy.  When I make a trade that doesn’t work out, it
almost always because I didn’t stick to my buy rules. If you have a margin
account, that provides you considerable leverage in a bull market … it can
really hurt you buying on margin when the market is rough, but if you use it
sparingly and only at times when the market is beginning a new run up it can
be very powerful.

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