Because of the scoring rules of CAPS, I treat this portfolio a little differently, I'm sure you do too. The one aspect I hadn't really figured out was what to do with my big losers? hold or delete? once you delete them, they count as losers forever so there's an argument to just hold on to them and hope they come back some day, especially if you still think they will outperform in the future.
But I am now instituting the same 30% rule I use with real life losers- once you've lost 30%, I sell you. If I still believe in you I'll move you to a watch list and buy you again when you start to show a little positive mo. Especially in CAPS. If you keep a 50% CAPS loser, it has to outperform by 55% to become a winner- a very tall order indeed. But if you sell it, and rebuy it when it starts to tick up, all you need is 5% outperform and you now are back to neutral in at least one aspect of the scoring- the stock has given you one win and one loss. Of course I would keep it and ride it for awhile, I expect stocks I pick to win big. But if it fizzled after a small gain, I could at least score a quick win before giving up on it for good.
This makes good sense, right?