My Trading Log

[stthomas2004]

It takes a lot more to move say, a Lucent one dollar than it does a Microsoft. Its all in the percentage.

Look at WYNN which was 67 dollars this date last month, but is now over $95.
100 shares of that would profit you: $2800
Now look at LU which was 2.45 last month, and now is 2.55.
The same dollar amount would be:
2734 shares, with a profit of $273

Most of the lower stocks are more speculative, more risk, and some are just dead in the water from the dot com bust.

I prefer to disagree with you here.

[lehayes]

Originally Posted by stthomas2004

It takes a lot more to move say, a Lucent one dollar than it does a Microsoft. Its all in the percentage.

Look at WYNN which was 67 dollars this date last month, but is now over $95.
100 shares of that would profit you: $2800
Now look at LU which was 2.45 last month, and now is 2.55.
The same dollar amount would be:
2734 shares, with a profit of $273

Most of the lower stocks are more speculative, more risk, and some are just dead in the water from the dot com bust.

I prefer to disagree with you here.

You are comparing apples and oranges. Even worse, you throw in the statement about speculation. Which is totally bogus. The amount of risk is the same whether the stock is $1000 per share or $1.00 per share. Risk can be calabrated as well as the cost of the stock. How you govern the risk can balance the playing field.

It may take more to move a stock that is lower priced, on a regular basis, but if it is a stock on the up and rise, then you don't carry the same difficulty in movement. For example, I remember seeing JDSU on the radar 6 years ago at the $2.50 range, now it is at the $18 range. The charts don't show it now, but I have seen the same thing happen with MSFT. In 2000 it was at $120 a share and dropped clear to $21 a share. Now you look at the charts and it doesn't even show $120 per share even showing during that time. Oh well. The point is, that JDSU used to be a very low priced stock. Now it is climbing fairly well. Obviously there had to be sufficient movement to get it there.

[stthomas2004]

JDSU had a reverse split, its not up from 2.50

[Yee Sian]

I think he meant JDSU trading at $250? It used to trade up to more than $1000 in the year 2000. From bigcharts.com, MSFT seem to be trading only at $60 at it's peak in the year 2000.

I'll think the issue is more with your guts, rather than with the stocks. A person with more guts to ride through drawdowns(if he/she is long) or rallies(if he/she is short) will take on stocks with more volatility. How, I calculate the volatility would be similiar to stthomas, using the percentage. What i would worry about is how much I allow it to correct before I close out of my position.

I would say listing examples to support an argument isn't really appropriate, as there are always counter examples. I recall GOOG around $250 roughly 1 and a half years back. Now, it is trading around the $500 range.