Top Stock Picks Portfolio Comments
2018-07-16: Watch List candidate **** triggered it's buy point, and was purchased for the GSA Portfolio.
Current Stock Portfolio Positions: CH** (+6%), OP** (+6%), US** (+4%), FN** (+1%), RS** (+1%), FI** (+1%), MR** (-4%),
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Stock Picks Q&A View Select Entries from Our Mailbag. Also See Our Q&A Page.
Q: Dear GSA, I'm wondering about the timing of top stock picks. I'm assuming that you select the "top stock picks" because the particular
characteristics that you're looking for (earnings, volume spikes, etc, etc)
are all correct at the point in time that you select them. But I'm
wondering about top stock picks of a few months ago. Would you still consider them as "top stock picks". In looking at many of them, I see that there are certain characteristics that you now rate as "bad" as in passing through the stop limit price or being overvalued, etc. I guess the question is that if the particular characteristics of a past top stock pick once again lead you to believe it's a top pick, would you issue it again as a top pick, or put another way...when does it stop being a top pick?
A: We don't think there's an easy answer to this but we'll try. You are correct about the timing of our Top Stock Picks - we give more weight to the breakout volume, how far the stock is above its 200 day MA, and so a Top Stock Pick will have
a higher rank when the timing is "just right". Two scenarios could then play out:
So to answer your question, we normally do not issue a stock again as a Top Stock Pick in the short term. It stops being a Pick if the factors in 1. above have happened. If several months have passed, it's a whole new story, and a stock could repeat itself as a Top Stock Pick. In summary, it is best not to buy a previous pick just because the price
may be lower than the price when the pick was posted, i.e., try not to average down. Within limits (5-10%),
average up into a position. This way you will force feed your money into stocks moving in the right direction.
- The stock pick doesn't act right, breaks our stop levels, loses relative strength, is 10-12% lower than the price we paid, etc. We would probably see a fall-off in its GSA Rank, and wouldn't want to consider it again.
- The stock pick moves up a few points, hopefully makes a new high, and then backs down. If the GSA Rank holds up, and the stock moves down to say a point or so above what we paid, it would still be a strong Top Stock Pick for purchase.
Hope that helps.<< Previous Q&A Next Q&A >>