Quote from $CostAverageMAN:
Coolweb
In keeping with the idea that you have to have a diversified portfolio, I find it best to overweight the higher beta names (cyclical sectors when we are coming off lows have been working for years).....The way I see it is very similiar to what you were saying....I like the DELTA industry searches that come from Vector Vest and then I invest in fast moving sectors if I don't already have money in place in those areas....But there is more to it than that.....You have to have money in the right stocks in those sectors.....A great example is meat products....
So I see that meat is on the move back in early JAN. of 2007.....I got some choices to pick from:----TSN the largest then HRL, SFD, SEB, PPC all the big US players then I got SDA and IBA for some international....SAFM and CALM for the small cap plays here...
A nice simple 9 stocks to choose from....Well SEB was a position I had been in and the postion increase was hard to do for me, but the recent California fishing law changes was enough for me back up the boat again......
Now we got chicken in the midst of a AG commodity boom...Who would even touch this sector here? My bet was TSN cause I knew they would have the largest AG commodity futures contracts in place before the boom in prices.....I was right and the play worked.....I didn't even look at HRL cause of it's lack of volatility and PPC was 2nd best in the chicken game and I went with Tyson.......
Now to pork, SFD was the Monopoly here and it's was comming off a steep decline It looked as if it had just put in a perfect double bottom in Mid Jan.....
IBA and SDA were my only play on international meat stocks and I had that feeling that food was going to be a safe place for 2007 and 2008...
Small cap CALM was making new highs and an easy choice...
SAFM was not what I was looking for and too much like the large and mid cap stocks I was playing.
So bottom line there is stock selection in most areas of each industry and homework does make sense, where in others like steel/metal it was everything had to be bought cause you never knew who the next deal was going too...
$COSTAverageMAN
Pretty complicated - requires quite a
bit of special industry knowledge.
How good ist VECTOR VEST btw??
Charly
very friednly - thank you.