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Does this ever happen to you? (re: PWER's 22% drop)

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February 04, 2011 – Comments (19) | RELATED TICKERS: PWER.DL.DL , TGE

Do you ever pick a stock just to see it plunge, while the stock you decided not to buy skyrockets?

At the beginning of this year, I had a post My 11 picks for 2011, in which I said the following about TGC Industries (TGE):

I'd also like to own TGE, but I don't feel like I have to get it right now as approx. 60% of my 401K money is currently in Oil and Gas. I'm thinking if Oil And Gas really take off in 2011, I will profit nicely even without TGE. Having said that, I'd still like to get me some TGE before it hits $5.

Well, I never bought TGE. At the time of the post TGE was at $3.80, it's at $5.10 today. That's 34% return in a little over a month.

I did want to buy it, I believed in it (in comment# 13 of that same post, I said I expect a quick 50% return on TGE), but when I had money available, I deceided to buy another stock from that same list.

I decided to put more money in the position I already had: Power-One (PWER). Almost doubled it.

Well, as you know, PWER is down 22% today.

Let me tell you something, it hurts. It hurts even more now that I picked PWER over TGE (so it feels like a 50% loss). Not fun. Makes you feel like an idiot.

Do any of you know what I'm taking about?

 

Disclaimer: I still believe in PWER...

19 Comments – Post Your Own

#1) On February 04, 2011 at 12:50 PM, Goodnwell (< 20) wrote:

I feel your pain. No, really, because I did the same, in part because I like what PWER does. Then I bought $10 January calls. Check out the analysis in Seeking Alpha. It should come back pretty quickly.

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#2) On February 04, 2011 at 1:00 PM, zCreator (95.10) wrote:

I feel your pain, I lost 15% in DSCO recently. Should have got out earlier, finally managed today to take the loss and stop the bleeding. Just bought some RJA for the long term so I don't do something dumb with my money and compound my losses in the short term.

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#3) On February 04, 2011 at 1:01 PM, Momentum21 (39.12) wrote:

I just sold my entire KV-A stake last week.  I had been successfully trading around/getting lucky and decided that I didn't want to press my luck with potential BK while they were waiting for FDA approval. 

+160% today...

It hurts badly. I realize that it is pure speculation but speculators must hit a few of these every so often! The next surprise or two will more likely be in the other direction.  

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#4) On February 04, 2011 at 1:12 PM, dragonLZ (99.37) wrote:

 Goodnwell, I hope you are right. Good luck.

 zCreator, 15% doesn't sound too bad, I just hope you didn't have a large position. Good luck with RJA.

Momentum21, why did you tell me that. Now I feel sorry for both you and me. Bad story. Good luck in the future my friend.

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#5) On February 04, 2011 at 1:48 PM, leohaas (31.02) wrote:

All the time. I am even considering to pull a George Costanza!

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#6) On February 04, 2011 at 1:49 PM, portefeuille (99.66) wrote:

#3

And almost never sell the entire position

(from comment #54 of this post of yours)

 

That is still my rule #1 for maintaining some peace of mind in investing. It does lead to a somewhat "littered" portfolio though, hehe. My rule #2 is probably to buy a few shares as soon as possible once you decide to buy any at some point in time. My rule #3 might be to never use stop loss limits. Somehow the price of stocks I own going to zero does not annoy me as much as stocks I don't have, but at some point in time sold (or "almost" bought) "rallying" ...

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#7) On February 04, 2011 at 1:56 PM, portefeuille (99.66) wrote:

#7 And don't forget to catch falling knives and to throw good money after bad every now and then. And don't worry having over 50% of the value of your portfolio in one stock and out of the money call options on that stock. As long as that stock is like EMC a few months ago, hehe ...

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#8) On February 04, 2011 at 1:59 PM, dragonLZ (99.37) wrote:

 leohaas, Gorge was definitely onto something with his "do the opposite" idea... :)

 portefeuille, I used stop loss limits in 2009 (when I got stopped out of some stocks that recovered the same day), but not anymore. I learned my lesson. If I can't take a 30% loss, I shouldn't be investing at all.

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#9) On February 04, 2011 at 2:20 PM, Hotpicks101 (29.16) wrote:

I've got one that'll make you feel better. I bought CRUS back at 13 just back in november but put in only 506 dollars (I'm only 25) thinking i'd add a little more to it as time passes. Instead I just kept cash on the sidelines and missed it's crazy run up along with every other stock on the market.

To make things even worse, after learning a bit about them, I decided to give options a try for my first time by attempting to buy CRUS out of the money calls the day before earnings. Well after placing my order I found out my TD account was only approved for tier 1 options so I could only write covered calls, so I figured oh well maybe next time. Well next day after earnings the same option I had placed my order for was up 300+ %! Talk about beginners luck that should have been. Point is $h^t happens, I guess I try to think of it as a learning opportunity (after I cry and pout about it for a day or two). Best of luck to everyone this year.

P.S I decided to pick up a few shares of PWER at these prices, just seems too tempting.

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#10) On February 04, 2011 at 2:30 PM, Momentum21 (39.12) wrote:

portefeuille - I knew it was coming... : )

If I am going to whine about it later I should have held a little. My portfolio was getting/still is a little out of control. I needed to part with KV-A and shouldn't look back.

You rules are all good though. I think you still hold some KVA in your fund...congrats! 

 

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#11) On February 04, 2011 at 2:40 PM, dragonLZ (99.37) wrote:

Hotpicks101, WOW, that's all I got to say. Good luck. 

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#12) On February 04, 2011 at 2:51 PM, chk999 (99.97) wrote:

There is a hellacious short interest in PWER, so they think they know something you don't. (This is not a claim that they do, but I always watch for a large short interest and want to know why.) The raw numbers look pretty good, what could go wrong here?

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#13) On February 04, 2011 at 3:36 PM, dragonLZ (99.37) wrote:

chk999, I think that huge short interest might be due to the fact that PWER had an incredible run in 2010. No stock can go up forever.

But hey, what do I know. That's why I won't be adding to PWER until I see some strength. 

(I'm not as brave as Porte to go catching falling knives).

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#14) On February 04, 2011 at 4:11 PM, zCreator (95.10) wrote:

@7 portfeuille: You have really a strong stomache and I think that's what makes you so good. I had a fairly large position (at least for me that is), a little over 16000 shares of DSCO at an average of 3.25. After reading this article I lost confidence and got out with a loss. I'm thinking of taking a small break for a few days so I don't get in to the loser's psychology.

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#15) On February 04, 2011 at 5:48 PM, TSIF (99.96) wrote:

I'm not sure when PWER will show some strength. I usually find it takes about 3 days for things to settle on a bottom after such as trashing, but contrary to my norm I added to Power at 9.05 this morning.  Gives me a cost basis that isn't too bad, only down about 2.5%.   35 Million shares today and the large volume in general should help form a base, but I agree, the rapid rise the last year left the base weak.

I'm sure we all have our tales, especially if we consider what we "Might" have done with the money we sunk in the loser!!!

Best not to think too deeply, other than to gather what we can learn for the future and build some scar tissue for the next time!  Have an extra dose of Koolaide and be glad that in the case of Power-One you still have some potential.  It's not YRCW!   ;) 

P.S. Why did you buy it after I talked it up on Halloween....didn't we agree that we do much better shorting each other than agreeing!!!!

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#16) On February 04, 2011 at 9:26 PM, dragonLZ (99.37) wrote:

Why did you buy it after I talked it up on Halloween....didn't we agree that we do much better shorting each other than agreeing!!!!

After ZLC has shown that miracles (of both of us being right) can happen, I thought the curse was over. I guess I was wrong.

p.s.

Please tell me you hate ODP. That's another recent purchase of mine.  

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#17) On February 05, 2011 at 1:56 PM, TSIF (99.96) wrote:

Can't say that I hate ODP, looks like a possible spec play.  Earnings are Feb 22nd, it looks like it's charting up.  Overall, Staples is much more investment grade, but clearly not as much "fun" from your metrics!  :)

Walmart/Target etc are pulling away too much of the office suppliers business.  Small business,however, appears to be picking up.  Sorry, I see some short term potential in ODP.  I think you and I have agreed on a few that did okay short term.  For that to work, UL has to disagree with us.  :)

I'm in TLAB this week for my spec play, for a 15% target.   I don't think you would think the chart is pretty, but check back in in a week. 

Hope you're getting less snow than we are!

TSIF

 

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#18) On February 08, 2011 at 6:17 AM, dragonLZ (99.37) wrote:

OK, now I have somebody to blame if ODP tanks. :)

Good luck with TLAB.

p.s.

Speaking of snow, I'd like you to check out this post.  You told me many times my chart-eyeballing can make only short term. Is two years short term? :)

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#19) On February 08, 2011 at 9:48 AM, TSIF (99.96) wrote:

Nice blog.  I have no issue with the chart calling.  Volume is important in investing. It shows "interest" and helps set resistance levels. Your blog, however, didn't change my opinion that it's not a stand alone tool, nor that it's a long term tool.   Many of the equities were down 80 or 90% at bottom. The S&P is up 80% since then.  I would expect a very wide range of results on any basket of equities called at the bottom, including some multi-baggers and some laggers.  There are few equities that didn't have huge volume plays during that period.

I also debated with those calling a second correction and I was as serious thorn in the side of some EWT users who were using it as a single tool.

If you are happy with your chart calling then go for it.  Adding in fundamentals might help against a Borders or YRCW, but nothing is perfect.

I think the moral of your story is to have conviction. If you do nothing then you're gain nothing.

Too bad we didn't have the conviction to buy and hold some of the multi-baggers!

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