Holding period is important, just churning is not very helpful. If you like something, stick with it. for stock picking, finished another book which supports Graham: invest in high ROC low PE companies. but then decide the time to buy based on tech and overall market, so you can buy on a dip rather than at a top, so may use further refinement such as price viz--viz 52wH/L ratios , other pivots and tech indicators.
for the coming weeks, why there should be a correction:
Macro View (money week and some other blogs)
- in the most recent IAA (investors America) sentiment poll, about 53% think markets will be bullish, this was so high last time right before the correction in Jan 08.
- mutual funds in the US have seen 20 consecutive weeks of net cash inflow, which means retail investors are finally getting sucked in.
- Short interests are down, which means the short covering which helped propel the rally will not happen
- September is historically the worst month for markets
- Volumes have not seen the kind of building up which should have come with this rally.
Tech View – most short term indicators are signaling to a correction, although long term indicators are still bullish.
India – bad monsoons, but better IIP numbers, positive Direct Tax Code (surprising as this is supposed to come in effect by July 2011, that too who know, why should nifty jump 130 points?).Was there anything critical in PM's independence day address?
US – Bad retail sales, bad consumer confidence, another big bank bankruptcy in the week that just ended.
Coming week – Japan data, some important data on US housing and housing earnings.
To watch - Salon, Andhra Cement, Orient Paper, Oil Country (Mind you these are based on fundamentals, so don't expect immediate returns)
