Million Dollar Challenge

I have entered CNBC's Million Dollar Challenge, a 10-week contest to see who can invest a million dollars the best. My plan is to use the 80/20 Principle to pick the best performing stocks for my portfolio with an added edge, forward view.

The contest runs 10 weeks starting March 5 and ending May 11, I am entering two weeks late Monday, March 19. Here are some of the investment rules that I will try and follow:

Invest when a stock is low.

Invest in stock with a low less than 17 P/E, lower the better.

Specialize in stocks you are familiar with, hobbies, work related or interested in.

Cut your losses, when the stock falls 15 percent below what you paid for it, sell it.

Don't cut your gains, resist the urge to take profits too soon. Don't sell until the price falls by 15 percent from its recent high. Note that by the 80/20 rule it is usually true that 20 percent of a portfolio contains 80 percent of the gains. Always look for the strongest 20 percent to beat the 80/20 rule. Keep reworking your portfolio to keep the best few and hold on to them.

A few ways that I will be trying to use the 80/20 rule and find the few best companies:

1. For the short term (this 10-week contest), I will be looking at sectors with the highest revenue growth in the last three months.

Financial

Technology

Services

Transportation

Energy

The best performing sectors in the last three months have been:

Consumer +7.24%

Basic Materials +6.38%

Capital Goods +4.77%

Utilities +1.99%

Services +0.74%

Of the top revenue growth and best performing sectors are services. So I will be favoring services in my quest for the best companies. Especially retail drugs +13.5% over the last three months.

2. I will first look at the previous day of trading that was a down market. In that down market look for the top 10 to 15 gainers by percent and revenue.

3. From this list, look at the performance of each over the past three months. I am looking for a low curve with a slight up turn. I will be buying an equal amount in value of each of these stocks.

4. Highlight the ones in services and retail drugs. I will buy twice the amount in these stocks.

5. The last tool that I will use, I will refer to as forward view. I took a few moments and cleared my mind, then thought about the chart of the highest gainers. Then waited for any clues that may come to my mind about who would become the highest gainer on the next trading day. That night I dreamed about trains. I then thought about the congestion on the highways. I will buy four times the amount in the rail stocks in my list.

On my first day in the Million Dollar Challenge I will be investing $672,240 on seven stocks to create my portfolio. I will be tweaking my list and adding new stocks over the next few weeks following the guidelines that I have set. With $327,760 in reserve I will also be buying more of the best performers that look like they still might have a good run up.

If you want to check out how well I am doing you can watch for my name on the published CNBC list of highest players. Look for "Hubert in Georgia"

Article Source: http://www.content.onlypunjab.com

About the Author: Hubert Crowell, Cave Explorer After working in service for 23 years with Eastman Kodak Company as a service person, technical support and training specialist, followed by another 13 years working for other companies in the service field, I have decided to share my ideals on improving the service department. I would like to thank Jack Ingram, my supervisor at Eastman Kodak Company for the encouragement and guidance until his retirement. I would also like to thank Barco Projection Systems and all the great employees that worked with me for the last seven years before I retired. For complete paper on The Service Department, Please visit my web site at: hucosystems.com/ I have started writing as a hobby and plan to write about my life, work, hobbies, religion and many other things of interest to me and maybe others will enjoy also. For a complete viewing of my articles with photos please visit my article web page at: hubertcrowell.name/

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