PHILOSOPHY & METHODOLOGY

Here viewers will find weekly, beginning in the first week of January 2008, 2 or 3 stock picks per week. If I cannot find anything, there will not be anything. My methodology emphasizes quick timing and a continual preference for liquidity versus investment.

My biases include the following:

There is a time to be in the market, and in a stock. There is a time to stand aside and a time to go long or short. I really don't care which way a stock moves as long as there exists a potential for capital appreciation. Stocks are not pets and one should never have an emotional attachment to them. They are there for the purpose of giving the buyer profit.They are not there for the image enhancement of the Board of DIrectors or the CEO. They are a liability to the company and they can become a liability to you if you don't watch your step and don't read the signals that tell you how much is being sold and how much is being bought.

Volume tells me how much is being bought or sold and what the true sentiment is for the stock . Volume represent the alpha and omega of a stock. Without volume there is nothing. Volume creates stock price. If nobody wants it, it does not exist. If everybody wants it, it is everything.

I have little interest in fundamentals. What I care about is whether people are buying a stock or selling a stock. That primarily determines whether I go long or short. The other determinate is how wavy the price pattern appears on a chart. Yes, I like roller coasters where I see what is coming ahead of me. If it doesn't look right on the chart, I don't want it because I can't get the ride I am looking for through the stock. The bigger and longer loopy curves really turn me on because they offer an element of predictability and that helps in the selection decision-making process.

Generally, with rare exception (i.e. Berkshire Hathaway B Shares), the stock has to have a average daily volume of 1 million shares for the past 60 days. That helps ensure an execution of the trade at the price I see coming and implies an efficient market trading in the stock. In other words, if I have to dump it or cover it, I can do so quickly and easily. That reduces the risk of missing the trade.................