Ask Colin

In your seminar you proposed an initial entry into the market in the third phase of a bear market at 10% of funds. In Shares Charting No 2, you said 20%. Why?

The difference here just reflects changes in my plan as time has passed.

I thought that the original strategy was a little too slow in getting into the market.

Other influences are that the present bear market seems to be unfolding a little differently to the past. As you know, I am always suspicious of anyone who says "it is different this time", but what I am talking about here is a fine distinction, not a proposal to do the opposite to what has been proven to work well over the long term. What is different so far is that the bear market is lasting a relatively long time, rather than being a fairly fast readjustment over 1 to 2 years. We have also had premature Coppock signals in the US, UK and Japan, which is technically a function of how long the bear market has been running for. I discussed this in Shares Charting No 2.

Finally, the difference between 10% and 20% sounds a lot, but is really not a major change. Market risk strategy is not a precise skill. It is a set of guidelines with room to move depending on how I see the situation.

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