Posted on May 21, 2009 by in Letters

As may be seen EEb has broken out.  While we are short the S&P and suspicious of all these breakouts you still have to take obvious trades.  The way to dap down risk is to divide your capital commitment to this -- or any issue -- into 3-7 tranches and just commit one unit to the initial trade, then add on if the trend proves true.  And then, of course, it goes without saying that  a stop is placed under the immediate low -- about 3-5%.

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