Hershey's stock picking methods

Discussion in 'Trading' started by oddiduro, Aug 19, 2003.

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  1. Jack,

    Rather than corrupt the stochastics thread, which is dedicated to the ES, could you outline the method you use to pick stocks?

    I remember you talking about it in another thread, but I forgot which one.

  2. "I make short lists in the evening. To get a net of 10%, I usually find that the lists contain stocks that move over 20% at least five times,in the last 6 months. I assess them using the assessment sheet I posted in the journal.

    To get the universe from which I make the short list of stocks that are going to break out (BO) the next day or so, I use stockstables.com. I do a weekly sort to get a list about 100 long (you adjust it's quality according to the times to get the length). I eliminate low prices since my capital is of a size that would cause me to hold too many different stocks and thus divide my attention (I am 70 and not as swift as I used to be).

    The scoring I use allows me to classify the portions of the 100 stocks into three parts: 7's, 0's, and 1's. Look at the scoring and the place where the scores fit on the 8 parts of the cycle in my journal.

    Because the P, V relation (See my journal for explanations of this in three ways, one of them will fit your personality) is the basis of the investment cycle and because I came up with a scoring technique using the three most important market variables. I sort 16,000 stocks in a way that gives me an order on the list that puts the three consecutive scores in their order on the list. I determined how to order the list by using the leading indicator of price. (sort by increasing volume)

    This puts 7's at the top 1's in the middle and 0's at the bottom.

    I have 7 Boolean equations that do the same thing in TC2000 version 3.

    Either process takes about 1 minute.

    My short list starts with the 0's and maybe a couple 1's. I have tenured stocks (those I trade repeatedly over the years.) and if they show up they go to the top of the post (post means afterwards) assessment list. I pull their past assessments out of my three ring binder and put them in the current short list folder. I assess the candidates on the short list. The Rank value they come up with puts them in the order of potential buy.

    It is my custom to xover trade. Any stock I hold has a money velocity. When it begins to flag in it's trend, it is elligible to be sold. Stocks on my potential buy list are going to BO, when they do and it is not a failure, their money velocity goes up. As it increases it comes into range (focus) for me. I compare the money velocities of the holds and the potential buys. They cross over each other and that is the timing of my entries and exits.

    Some people have R/R's. Some have money management to cover the risks their methods cannot handle, some have targets and trailing stops for exits. None of these beginner strategies apply to any approach that has answers for the risks that are real for such people and all others who actually deal with the risks in their strategies.

    The questions are: Do I iteratively refine my approach to eliminate risk? Or, do I just not deal with it and just put a corrollary band aid in like R/R, Targets and emergency stops to avoid fixing my approach? These people also contend or deal with a thing called drawdown I believe. The question during their drawdown is: Why can I afford to loose time? This may confuse you. In investing time cannot be recovered; money can.

    The basis of any approach is to optimize the compound intrest formula. All approach deal with one thing: making money."
  3. bubba7


    Sure we could do that here.

    To keep it brief and because the labor Day deadline I am on for real time trading in ES, I request that we really focus this with questions after I just gather the prior posts under this thread.

    I contribute best in response to others by operating where they are. Let me fill in the basics first in a short time.

    Because most people (4 out of 5) do not agree with what I do, we can concede that right from the start and just forego their input. I would rather have people who are proactive and creative commenting. What I do is a minority thing and I have been learning about this since 1957.

    There is a situation with ET where many members do not want to fill the space here with stuff that is not trading. My view is to make money as fast as possible, so I have chosen the use the compound interest formula's dictates on the combination of variables that effectively connect me to the potential of the market. This means that I have capital in the market about half the potential time and it is rotated through stocks according to their pace of capital appreciation. I figure that I contribute to the free enterprise system by providing capital for it's operation (that is called investing) and at the same time I am acquiring additional capital as fast as the market can give it to me by being at the right place at the right time (this is a trading concept).

    My approach is canned. Persons have used it for long periods of time. A typical beginner performance for six months is 11.1% profit per cycle where the duration of the cycle is 6.6 days. My general objective is 10% every 6 to 8 days. You can see this inital performance is adequate. the person was above average in his efforts he converted my stuff to C language software and used that. We met for 4 1/2 hours after his first efforts and he improved 20% by tweeking. He obtained the info on what I do four hand at a time when emailing was how it was done.

    This is our starting point. What I do works. What I do has a level of performance when it is transferred to others. It is a canned approach that has been done since 1957 and it has been adjusted for use on things like computers when they were invented.

    I am an older person so I am not used to harshness and bullshit from people who have AGM's they need to exercise. If you need to act towards me like electron, Fruity Pebble, baggerlord, trend fader, etc, this time out take it somewhere else. These people are B people and they are not needed as helpers of other ET members in this thread.

    Undoubtedly this thread will be moved to chit chat or whatever; that is what happened to Mr. Market's investing approach. This will be a thread on a comprehensive trading method for stocks. It will involve primarily my strategy, the use of TA, and trading. Depending upon the needs of members, it will go in the direction they choose. I will lay it out pronto. If people do the tasks and report, I will critique. It may be that I trade in different capital ranges but that does not matter; it is just a consequence of using the stuff.

    A very sharp person invited me here and I appreciate it. Nhkoi also has vast resourses for getting to helpful places. Others here have great skills in processing stuff and doing illustrations. All of these things afford members the best of all possible environments. The key for success is questions. I am not a good typer and I write run on copy. to fix my mistakes you spell check it and use high liters. Yellow for facts you think fit you and black to cross out what you do not understand or what I do not communicate. In other forums, I have been told, years ago about 10,000 people kept notebooks on this stuff. There are many websites that are set up for this also. Most are foreign. Several universities log this stuff too for study purposes.

    My intention here is to be helpful and effective and to not have to spend excessive time getting posts removed from this thread that are AGM oriented.

    Let's go for it.

  4. Jack... I have to be honest your claims are a bit ridiculous... where do u get 11.1% from.. why not %11.2??

    Why 6.6 days??

  5. The Attachment is in color and shows the whole system that I use. I work systemmically and construe a system to be: a structure, a process and the results the system achieves.

    The QA ROI file is named as a Quality Assurance Return on Investment file.

    QA starts with the manner in which you choose the stocks you use. A universe is selected and it is kept current weekly on the weekend.

    Today there are many information sources. The red funnel on the left shows you some convenient ways to get a universe. I call this culling. the principle used is the have very high quality stocks that do what we need them to do.

    The blue box, Data Gathering is a daily task that you do to appraise the chosen stocks that you culled into a universe. Short lists emerge.

    Before 2000 I used Easy scan in TC2000 Ver 3.0. That is no longer supported and it's successor cannot process the maths that Ver 3.0 could. We will use a website as a substitute for this.

    The purple analysis box hows the processing of the four short lists into the cycle for making money. This is a prioritization process.

    I did this for several years as a series of four emails: before open, 15 min into open, and two more within the first two hours.

    The analysis lists were posted and they had additional columns for monitoring and trading.

    On the right you see the process. We post the stocks before they BO (This was named independantly by several people then I formalized it.) We buy before the Price moves. We hold until the cycle flaws appear. We sell at the peaking of price after volume peaks.

    Set up two 3 ring binders. One will have the five parts of QA and ROI under these two main parts. This is where you put stuff I post. I will transfer it to the journal when we have handled it here with Q and A and then I reduce it to clear, concise and crisp expository writing.

    The second binder will last a month and it will be filled with the days of the month. I do everything with time saving forms. You will have all of these. If you know someone else who needs to be a millionaire get them to work with you once in a while and duplicate what you do. This brings out differences in understanding and gives both of you a self correcting mechanism.

    As Q's come up I will work to understand where you are. To get this to work I have to go to where you are and support your efforts to get to where I am. As we do this I will explain the why's of it.

    I use the approach on the attachment because it chooses high qualty stocks, the stocks do what I want hem to and it connects me to the money source in a way that is most efficient for taking money out of the market and putting it into my capital base. The method is limited. I do not hold more than 100,000 shares of any stock at any time. This is not an OPM thing; OPM is not effective for making money it turns out.
  6. bubba7


    The person who did the calculation rounded to one significant figure after the decimal point.
  7. That is not true. I do make $. I just am having a hard time believing your bogus claims.

    Jack.. here is the reality. No one that was born on planet Earth can make sense out of any of your posts.

    It took 250 pages to explain your beginners method.. and 99% of the people that read the thread still dont understand what you are talking about. You take a basic premise like a stochastic pop and twist and turn it.. until you have 250 pages of confusion.

    Please some one.. am I the only one on ET that doesnt understand one word of what this guy is talking about on this thread?? Am I in my box and being selfish?? Or am I just one of the few traders here.. who demand the truth.

  8. Jack.. what bothers me is that you write 800 word posts and try to sound like some brilliant market technician.. You think that anyone that is not on your level is inferior.

    ET folks here is the truth...

    In the past few months a 70+ year old guy that claims to have earned over $1million+ in one day.. and trades over 100,000 share positions.. has posted hundreds of thousands of words on ET.. and 99% of the traders here can not make any sense of it.

    The man also claims that trading his stochastic method can easily allow a beginner to earn a nice income... I just find the whole thing a little bizzarre??? Am I the only one that feels this way?

  9. Go bubba7, Go.

    I would love to see you go for 1700% to 4500% a year (compounded). We promise to drop all the other "crap" and join you.

    Let's go for it.
  10. Jack has been asked to start this Thread.
    If you say 11,1% you have done an exact
    calculation, if you say 10-12% it`s more roughly.
    I thougt everbody knows that.
    I´m not interested in Jack`s methods because
    I`m trading my own methods.
    If you are not interested Why go on reading this
    Leave it to Jack and his students.
    For me this discussion is finished.
    #10     Aug 19, 2003
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