We know if we could time the tides of the market like sunrise and sunsets we would be rich beyond imagination. Because we can’t, we can use the tier system. Think of the tide as a trend. Think of the waves as mini-moves. You need to think in terms of “expected” lengths of trends- knowing the trend is your friend. Also realizing that trends end when everybody is on board and it looks easy.
Using the tier system allows you to stay involved in the full move, but reduces your risk. Just a couple of these positions can be life altering. It also keeps you from piling in or out at the wrong time, and also keeps you from hesitating at the wrong times.
Learn from your mistakes, and successes! Examples recently are Crocs, Inc. (CROX), IDT Corporation (IDT), Take-Two Interactive Software, Inc. (TTWO), RPC, Inc. (RES).
*DISCLOSURE: Long CROX, IDT, TTWO, RES.
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