I know it is hard to believe. Mark your calendar about 6 months from now to come back and check this forecast.

CM

Good luck out there!

Short answer: yes, 70%.

Longer answer:

I’m talking specifically about the true leaders. The stocks that have run up 100,200,300% or more during their bulls runs. The ones that are over owned and over loved.

Recently, let’s look at CROX. Gone. Look at X. SID. POT. CF. STP. SPWR. JRCC. DRYS. GHM. MA. While not all at the 70% level YET, well beyond 10 – 20%.

Also factor in that they haven’t show me that the selling is done in these issues yet. I can real off another dozen wonders that just died. Remember Toll Brothers or Pulte Homes? PALM? Lam Research? How about the mighty TASR?

Stocks that once reaped me huge fortunes are now garbage. Sometimes they reset and base. They get a second act and find a way to reinvent themselves. QCOM, DELL & IBM were basing nicely right before the panic. TOL is at 52 week hi’s.

Most of the time however, they are like TASR. A one hit wonder that falls out of favorand never to be heard from again.

O’Neil comments on this can be found in HTMMIS on P. 54 (elsewhere too I believe, but I’m too tired to look). I have a good friend and mentor who did some work to prove out O’neils theory and +/- it works. I’ve seen his work and did my own as well.

Former leaders die. New leaders take over.

Go back and think of all the hi-flyers you traded or missed during their bull runs. Look at where they are now compared to their hi’s. Most of the time the fall is unreal.

I hope this helped.

TSSS.

PS – I’ll proof read in the AM and correct any mistakes I made. Going to bed now.

So are you saying that these stocks once the end their bull runs fall 70% on average? From what I understand an average correction during a bull run can be 10-20% but still remain in its general uptrend.

70% is pretty intense, do these stocks historically return to previously highs or what?

I’ll comment on #7, in light of todays action. O’Neil did some interesting work with past leaders and found, on average, they fall off 70%+/- (IIRC) from their all time hi’s.

Take a look at RIMM as it is being ravaged. GOOG, POT,CF,MA,V,ISRG,CROX, FSLR, JRCC all these former leaders that were over loved and over owned may have a hard time here as rotation continues and they are sold off.

Again, nice work on the postmortem.

TSSS