Ask Colin

Your stock picking is concentrated on two models i.e. value and growth. Do you have a particular bias in the current market conditions? In selecting a stock under the growth model, do you apply reward/risk ratio in deciding on whether to take the trade? In the growth model, I have problem calculating the potential reward unlike a value model where I can apply Fibonacci retracement or previous support/resistance lines.

I think I have made this fairly clear in my articles in Shares magazine. I am strongly focused on value stocks, because they are defensive in weak markets. Also, the market has been swinging over to them for that reason.

I do not know how to forecast markets, so I have no way to work out the reward part of the ratio. What I rely on is limiting risk and using a trading plan that seems to generate good reward in the long term.