Strategy Lab: Screening for Losers

August 27, 2008

* Buy 300 shares of United States Natural Gas Fund (UNG) with a limit of $40 and a protective sell stop at $36.90. Enter buy transaction after 10:30am ET.

When I was growing up, I can recall that the official end of summer was signified by a Labor Day barbecue where we would gather and watch the MDA Telethon hosted by Jerry Lewis. It was the last memory before school started and the fiscal work year began.

For many investors, this will come as a relief. The summer has been brutal. From June 1 to Aug. 26, the Dow Jones industrials ($INDU) fell more than 8%, while the Dow Europe Index dropped more than 15%. At the same time, the price of oil dropped 8% as speculators ran from the coming storm of legislative action squarely aimed at controlling rampant manipulation done through unregulated exchanges.

Read the rest of the article and get a screening criteria to search for potential stocks to short.

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Written by Andrew Horowitz · Filed Under Screens, Strategy Lab 

Comments

2 Responses to “Strategy Lab: Screening for Losers”

  1. Walter on August 30th, 2008 1:26 pm

    Adam:

    Just recently discovered your podcast (which I enjoyed) and your site. I saw your article on UNG and the buy recommendation on 8-27. Given the big sell off the next day, are you still bullish and do you still own for your fund (as it got under your 36.90 stop? Just wondering as I bought in on the 28th towards the bottom of the selloff price.

    Thanks,

    Walter

  2. Andrew Horowitz on August 30th, 2008 1:55 pm

    Good question….We sold at the stop. Rules are rules and help to mitigate big problems later. I would be looking to enter again if volatility subsides. The point was to spread risk as we are short oil & gas stocks, so, added some diversification and when it hit stop, we exited. So, I while not “happy” about it, now is the time for caution over cowboy….

    Thanks

    A

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