Hi Scott,

> I know that your are very stock market savvy
> so I wanted to ask you if you ever heard of
> channelling stocks? And if so what do you
> think of the idea?

To be honest, I hadn't heard of the phrase channeling stocks before you asked your question.... After doing some searching, it seems to describe the tactic of buying and selling stocks whose prices tend to repeatedly fluctuate between two values....

I'm not very knowledgeable about this, since I tend to be a long-term investor (I like to find growth stocks which I think are under-valued, then buy and hold them for a few years). However, I have a friend who uses these kinds of trading strategies, and I think he does make some money doing it.

I think the reason why he has some success while many others fail in using short-term trading strategies is because he uses firm stop-losses. I know he has a rule that if a stock falls 10%, he sells it, no ifs or buts! Many people tend to hold on to a losing stock in the hope that the price will come back up, though often it doesn't....

I'm not an expert in short-term approaches to investing, but using firm stop-losses seems to be a good approach which this friend of mine uses. Cut your losses before they are too large!

Hopefully someone else here knows more about channeling stocks and can shed some light on that....

- Dien Rice