As I've worked on this book I have thought of some ideas and others have given me good ideas I'd like to share. Some of these ideas I may have mentioned already but it won't hurt repeating them.
Here's the best way to play the system:
1) Buy your stock initially when it is at or near its 52-week
low.
2) Start looking up the prices of your stocks a few days
before it's time to buy or sell. If one or more of your stocks
shows strong price changes, then postpone your buy or sell decision
and follow the stock closely. I'll give you an example: I owned
Cray Computer and the day I was about to see if I should buy or
sell, Cray went up $ 2 a share from $ 8 to $10. I waited a day; it
went from $ 10 to $ 11 1/2. I waited another day; it went from 11
1/2 to 13. I waited another day, it went down 1/2 a point and I
sold based on the system. You can play this game too. If your
stock is sharply going up or down, follow it day to day and get the
maximum move before you buy or sell.
3) Here's the key to increased profits (notice as I explained
earlier that I didn't use it in the seven year averages). Play
your stock the regular way until it hits the 52-week high (the high
should be at least 150% than your original purchase price). If you
originally bought at $ 5 a share, then $ 12.50 is 150% higher.
When the stock hits the 52-week high, sell all remaining shares and
use the money to buy another stock at its 52-week low and repeat
the process. You can always buy the same stock back later when
it's back at its 52-week low.
I envision you should have enough money to buy at least $1,000 worth of a new stock with the money you get from selling all remaining shares. Don't worry if you find out you now own $1,180 worth of your new stock. You set up your new spreadsheet the same as you have in the past. Cash is now 1/2 of $1,180 or $590 which you remember is also 1/3 of your portfolio total.
4) Again readjust your cash/stock ratio at least once a year.
More often would be better. Check your ratio after you have a
large sale. Remember you make your money buying and selling stock,
not earning interest on your Ready Assets account.
5) Keep some of your regular savings money in your Ready
Assets Account. You will make slightly higher interest on your
money and you have a little extra cushion in case the system needs
a little extra money to make some especially good buys at low
prices. We're playing it close to the vest keeping our cash at 1/3
of our portfolio total and run the possibility of running out of
cash occasionally just when the system is giving us great buys.
Having that extra cash there will give you peace of mind. Now you
can lend yourself money and you'll be playing the system the way
you should. You'll quickly pay that loan back with your profits.
I hope this bonus section also showed you that you too can figure out some ideas on your own that will increase your profits. If so, please share them with me and I'll add them to a revised version and give you credit. Again good investing and all the best.