30-DAY VS. 10-DAY MA

I'm afraid I made a bit of an error in not insisting on a 30-day MA for you guys. I was swayed by the fact that MSN doesn't have one, and because a 50-day MA is slow.

I like the 10-day, but it can get you hammered. It puts out more false signals. Therefore it becomes more like a buy and hold in a sense. That means you have to be all that more certain that (a) it's a great business, and (b) that it's really on sale.

Determining a great business is pretty straightforward, but in this market we are buying stocks that can go down like a brick simply because the market hasn't really dumped like it did in the 70's and early 80's when Buffett bought up all his bargains. We are pricing businesses based on certain expectations of future growth -- which in the short run sometimes cannot be achieved. And in this market, when expectations fall short, the sheep run for the woods. Thus the need to get out when they do.

But, having heard the various sufferings brought on by the 10-day, I now recommend it only for those of you who don't want to miss much of the big upsurge because you know it can't go down.

For everyone else, stick with a 30-day MA.

Now go play.