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reddingrunner (92.36)

Buying is Easy, Selling is Hard



December 20, 2013 – Comments (3) | RELATED TICKERS: NTT , DLA , UPMKY

It's all easy in CAPS, but in real life knowing when to sell is a lot harder than knowing what to buy.  If I make a mistake buying I can get out of it before I lose too much money.  If I sell a stock that then proceeds to soar, all I can do is cry over the money I woulda shoulda made.  It's a lot easier to fix a bad buy than it is to fix a bad sell.  

In CAPS, I just sell anything that underperforms by 15% or more, I might buy it back at some point but after a 15% drop I would need almost 25% outperformance just to turn it into a CAPS winner and the odds of that are always going to be really poor.  Otherwise I sell stocks that are winners on CAPS (5% outperformance or more) once my analysis shows that they should be rated "hold" or lower.  Take the points and run.  

But in real life I struggle with "hold"-rated stocks that haven't done much for me.  Do I sell and buy something from my "strong buy" list or do I hold?  This is really where the money is made or lost.  So far my decisions have been right more than 50% of the time, but not by much.   But I've "lost" a lot more money by selling stocks that I shouldn't have sold than I've lost by buying stocks I shouldn't have bought.

This week's "hot tips" (real-life purchases): NTT, DLA, UPMKY 

3 Comments – Post Your Own

#1) On December 20, 2013 at 8:01 PM, gr8twhtebuffalo (50.92) wrote:

Ain't that the truth. I recently went back and looked at the majority of the stocks I've sold in the last three months. The majority of them would've turned the corner and got in to the green.

 I especially like your 15% rule.

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#2) On December 20, 2013 at 10:28 PM, awallejr (37.00) wrote:

Red you so speak the truth heheh.  It is why I have become more partial to selling puts since it in effect forces me to "sell" (as they hopefully expire worthless).

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#3) On December 20, 2013 at 11:43 PM, jiltin (46.25) wrote:

You are right, taking a decision is tough, either buy or sell.

I have been watching MKTG. Yesterday, I decided to buy 100 HIMX instead of MKTG. It is basically priority I decided, that resulted 10% jump on HIMX instead of 40% jump on MKTG.

Analysing, major part is predicting future of companies, using various factors is really tough and taking decision is harder than that. 

 This year, it was 35% portfolio jump. Last four years,before 2013, I had never put single penny in any stocks, how naive I was !

However,10,000 os such little decisions make up your life, success or failure, you make your own choices and bear the consequences of your decisions. 

This is very common every part of life.  As long as we are doing great overall, it is fine.


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