I read Bill O'Neils book recently and then went onto looking at the I.B.D 100 Stocks.The List sounds great in theory but half the Stocks have hardly any Daily Volume.
There was a great article about 6 weeks ago written by that loudmouth Tobin Smith, who appears on the Fox Roundtable every Saturday morning. While he comes across as another shill, the article he wrote about the effect of the IBD 100 on some of these low float stocks was thought provoking. In his estimation, it was ludicrous for some of these stocks to be listed on the IBD 100. Try a google search for the article, worth the read.
when the markets in a confirmed rally i use to use the IBD #100 to find stocks to trade monday and tuesday mornings....i made a nice chunck of change doing it a few months ago when the market conditions were better, and i all i really did was place some buys monday morning and monitor them with some real tight stops, and get out of the position tueday at the open. It seemed like a "Cramer type effect" takes place in the stock when it makes the top 10, a lot of retail traders will just jump on board without knowing anything about the company or even how to day trade low float stocks, but they make the mistake of holding onto the position too long. But since this market has been pretty weak lately i havent even picked up an issue of IBD, i got the impression that the IBD lists are worthless during bad market conditions.
That article was an interesting read. Sounds like he wrote it shortly after getting his ass handed to him on a sell off. Complaining about the wrong type of investors buying his stock? Come on. He himself says there are a hundred ways to make money in the market. Why complain about the way someone else does it. He smugly states that his investors sell to the IBD folks on the way up and buy from them on the way down, since they are so early in recognizing undervalued stocks. So he buys stocks that are 30%-50% off their highs from these uninformed people. What does he do when they get to 75-80% off the highs and stay there? There are tons of stocks that are "undervalued" and get even more undervalued every day. IBD says over and over again that the IBD 100 is nothing more than a list, not 100 stocks to go out and buy right now.
Yeah, I agree with you on a number of points. It was sour grapes by Smith. I can't stand the guy personally as he is another one of the gloating "I told you so" guys they parade on the cable networks. I just find it interesting the weight that IBD has in terms of selecting 100 stocks that may, or may not be, prudent candidates given the market caps and floats involved.
I think the folks who called "Sour Grapes" are right. NGS Volume 517,200 closed 18.99 15 August 05 Volume 1,829,800 closed 31.32 12 October 05 He probably doubled between 10 and 20, and then gave it all back on the short side between 20 and 30. Moron.