SHREVEPORT, La., Dec. 6, 2004 (PRIMEZONE) -- Stock-Letter-Daily.Com (http://www.stock-letter-daily.com -- an affiliate site of StockPickReport, the web's only non-mainstream stock rating service), rates Merrill Lynch Semiconductor HOLDRS, Advanced Micro Devices Inc., Amazon.com, Viacom Inc.
STOCKPICKREPORT RATINGS:
Merrill Lynch Semiconductor HOLDRS (AMEX:SMH) -- BUY
http://www.stock-letter-daily.com/rating.asp?format=single&ticker=SMH
Advanced Micro Devices Inc. (NYSE:AMD) -- WEAK BUY
http://www.stock-letter-daily.com/rating.asp?format=single&ticker=AMD
Amazon.com (Nasdaq:AMZN) -- BUY
http://www.stock-letter-daily.com/rating.asp?format=single&ticker=AMZN
Viacom Inc. (NYSE:VIA) -- BUY
http://www.stock-letter-daily.com/rating.asp?format=single&ticker=VIA
STOCK COMMENTARY:
Monday, December 6, 2004
StockPickReport Commentary
IMPORTANT: Don Harrold's email address has changed. Please
send all emails to don@stockpickreport.com.
The Importance of Targets and Stop/Losses
Many traders ask us about targets and stop/losses. We take for granted (by "we," I mean, StockPickReport) that this ought to be self-evident. When a trader buys a stock, he or she should KNOW at what price they will sell. BEFORE they buy a stock. Not after. BEFORE.
Salespeople have a saying, "People buy for emotional reasons and justify their purchase with logic." Stock purchases are often the same. Traders buy sometimes for all sorts of reasons, but don't know what they intend to do with the stock. If you buy a stock and don't know where you will sell, we suggest you immediately decide on a target. (Hey, the 10% rule above may be a place to start.)
If your stock hits your target, SELL. If you want to get back in, then initiate a new trade. Set a new target. SELL at the target. Repeat. Rinse. (You get the idea!) A wise trader once said, "You can't lose money if you make money." We agree.
On the "flip side" of targets are "stop/losses."
If a trader gets into a stock and the stock moves against the trader, the trade should be over. That "ought" to be it. But, sadly, so often it's not. We think we know why.
Look, people are generally taught to WIN, not lose. So, much emphasis is placed on "win-loss records". We believe that trades should be looked at for what they are, business decisions.
Forget "win/loss." Think, "make money", or "conserve money" (warning: over-used baseball analogy on the way...).
In baseball, an all-star player bats .300. That means 7 times out of 10 the player did NOT get a hit. However, the times he DID get a hit are what count. In the stock market, it is OKAY to have more trades go against you than not. It is NOT okay to lose more money than you make. We suggest rigorous use of stop/losses to conserve cash. Don't try to be a hero and turn every trade into a winner. Accept that some (if not most) trades may "go against" you and learn to revel in your "lack of success."
As you know, our stance right now is that the markets are overbought. Much risk of downside. Our opinion is that, of the two choices, "stop/losses" are more important now than targets.
Remember, if you have any questions or comments, please email Don Harrold, don@stockpickreport.com.
For More Commentary Go Here: http://www.stock-letter-daily.com/index.htm
WHAT THESE RATINGS MEAN:
StockPickReport.Com ranks stocks with technical analysis. These ratings do not indicate a "long term" view. These ratings reflect an opinion for the short term. These ratings may change based on market conditions.
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If the links to our ratings above do not work, please use these:
Merrill Lynch Semiconductor HOLDRS (AMEX:SMH) -- BUY http://www.stockpickreport.com/rating.php?sym=SMH Advanced Micro Devices Inc. (NYSE:AMD) -- WEAK BUY http://www.stockpickreport.com/rating.php?sym=AMD Amazon.com (Nasdaq:AMZN) -- BUY http://www.stockpickreport.com/rating.php?sym=AMZN Viacom Inc. (AMEX:VIA-B) -- BUY http://www.stockpickreport.com/rating.php?sym=VIA