In marketing product lifecycle analysis, they used to talk a lot about four types of products: Stars, Cash Cows, Question Marks and Dogs. You developed a different strategy for each. Stars and cash cows were big money makers. Question marks were just that and you wanted to get rid of dogs with their low market share and low market growth. While selling shares in a stock system is very different than selling products in marketplace, there are lessons to be considered for Empire Avenue.
People are regularly telling me that they want to buy more of my shares as soon as they have enough money. I am getting pricey and you have to accumulate some cash to make a significant purchase. Sometimes, I go look at these portfolios. (Something you should do from time-to-time to get a feel for what others are doing.) When I review their investments, I often see that they have several shares that have lost money several days in a row and worse yet, the person behind the stock in question has not been active on Empire Avenue for days.
I have had the good fortune to have my share price triple in the last 9 days. My share price has jumped every day. For the sake of our discussion, all me a cash cow — milk me for profits. Those losing value, again using those marketing terms, let’s call dogs. In many cases you should get rid of your dogs and buy cows. In just one day, this could mean the difference in several dollars a share for your purchase.
I do try to give people a chance. Too much trading costs a lot in commissions. However, for all I know when someone goes inactive they may have had enough of Empire Avenue. If they come back to life, sure I have lost a few bucks there, but I have also used this strategy on people that were in the twenties who are now in single digits. I have made a lot more money using this strategy than I have lost.
Okay, you like some of your dogs. You may even hate that I am calling them dogs. (The stocks — not the people by the way.) So, make some more money by switching to cows and use the extra money you earned to buy them back if you want — especially if they are starting to chew their cud more and more. In a few days, I have made enough money to max out my purchase of anybody I want including those at the top of the leader board. By focusing on my success, I can do a lot more to help people than when my share price was in the low teens.
So, focus on your cows. By doing so, I am pretty sure, you will be mooing yourself before long.
So, what do you think, is this just smart money management, or do you think I am about to say, ‘greed is good’ next?