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Jim Cramer's AUGUST TECH Buying works but it's not for me....



April 15, 2008 – Comments (1)

Jim Cramer believes in Wide Bracket Buying.  You can take that method and extrapolate it to an entire sector like Tech.  But, doing so means abandoning this whole "Buy Tech in August Only" methodology. 

You do not wait until AUGUST to buy TECH.  You have to have an iron stomache because the TECH Sector requires being patient, buying on the dips.. Buying as TECH stocks slip and slip from 1 month to the next.. Knowing that the end of the year Holiday Season will lift the prices of  most/all of your Tech Stocks.

As an active stock trader you can't really strengthen your position well in TECH by waiting in August.  What happens is TECH Stocks get pricier as they Climb up dramatically from August to January.  You buy on the early in TECH because you want to buy when everyone else is Shorting.

Investing is about being contrarian and that means having to stop worshipping Jim Cramer all the time.  Jim's method of investing works... I'm not saying it won't work.  It's just not a method an average investor should get into.  They should be focused on studying the sector, the market, and the individual companies on the LONG HAUL and not on some short term pipe dream.

Tech is cyclical so by "Long Haul" I mean 1 year.  You buy cheap beaten down Tech starting in FEBRUARY (knowing that TECH will get beaten down all the way to AUGUST sometimes) and sell in December/January.

Sure.. Sometimes AUGUST provides you with the cheapest prices for TECH companies.  But how many people have the time to study which Tech Stocks they like best during the same month you are supposed to buy?   Personally... I'd rather study TECH companies... Buy on the Dips all the way to August and let the Holiday Season give me my earnings:-)

Am I right or wrong?  I am a new investor (newbie) but this is my method.

If you get into TECH in August you'll have little time to determine which TECH Stocks to buy and which to pass on.

1 Comments – Post Your Own

#1) On April 15, 2008 at 5:37 PM, AnomaLee (28.84) wrote:

Jim Cramer's method, huh? Following 99% of other investors is a good way to the poor house, and Jim Cramer is no exception. He isn't some legendary hedge fund trader. There are hundreds of fund managers far superior to Jim Cramer and nothing he has ever spoke was an original thought.

The only positive I like is that I am glad he makes more people aware about the pros of investing, but he's just another person who is over-credited for being a Harvard Grad.

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