ridge list revenge of the buy and hold(ers)

  1. 3,694 Posts.
    For anyone interested:

    3 months ago the stop loss enhanced Ridge List was $9000+ ahead of the original list. However with the recovery in small and spec stocks the buy and hold list has finally hit the lead, rising $4000 against the SL list in the last week alone.

    As at last Friday the 'buy and forgets' was $3404 ahead of the SL list which now has only 3 of 59 stocks remaining (GTP, KZL, WBC). This shows up the inherent weakness in the system in that while it takes money out of a falling market, unless it puts money back in a rising market it misses the big gains.

    A system allowing re-entry on a 20% rise from the lows after being stopped out would have meant substantial gains in a number of stocks.

    i.e PTD entry at 207, stopped out the next day at 106 (phew!), ultimate low of 79 for a theoretical re-entry at 95. I always expected PTD to bite me but there are a number of otherstocks which have bounced 100%+ from their lows.

    I should have built re-entry into the system but as this is a theoretical portfolio which I only devote 30 minutes a week to, I wanted to keep it as simple as possible.

    On the upside (if there is one) the SL portfolio now has $55513 sitting in a CMA. Allowing a nominal 4% and assuming no further transactions the CMA will produce interest of $1269 at the end of the 12 months and with only 3 trades in the market, downside risk is limited.

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