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getrichdietrying (82.31)

When is a good time to close a position?

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April 18, 2009 – Comments (11)

Fools says hold till you make it like Bufett, or Dell 200 times what you open. Leaving it open for years. I am an impatient person, I do not want to wait 2,3,10, 100 Death yrs to find out I finally made that 10% growth of year compounded to retire without begging from family/freinds. So what is good time to open and what is good time to close? 10% or wait till it reaches that imagined, next "Hidden Gem." Cause they are out there but what would you do?

11 Comments – Post Your Own

#1) On April 18, 2009 at 10:42 PM, Josher429 (< 20) wrote:

Depends why you bought it...

 

As an investor, I look for catalysts and themes as to why that stock should go higher.  Once that story no longer exists I close the position.  I'm sure a lot of people also use TA to tell them to hit the road. 

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#2) On April 18, 2009 at 10:45 PM, ResearchLover (42.05) wrote:

Some say you should always get in to a stock with a target price in mind.  I would check when the stock approaches the target price, looking at technical signals (if you want to maintain growth short term), or fundamentals, e.g. forward P/E (if you are still a believer in the company long term).  More advanced traders look for increasing or stable margins, otherwise they sell right then and there.

 I myself tend to get in to a stock with a target time to reconsider in mind, basing the decision to buy on macroeconomic conditions or trends, and setting the target time to reevaluate when conditions are likely to have materially changed, in a direction I cannot yet predict. 

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#3) On April 18, 2009 at 10:46 PM, ResearchLover (42.05) wrote:

Some say you should always get in to a stock with a target price in mind.  I would check when the stock approaches the target price, looking at technical signals (if you want to maintain growth short term), or fundamentals, e.g. forward P/E (if you are still a believer in the company long term).  More advanced traders look for increasing or stable margins, otherwise they sell right then and there.

 I myself tend to get in to a stock with a target time to reconsider in mind, basing the decision to buy on macroeconomic conditions or trends, and setting the target time to reevaluate when conditions are likely to have materially changed, in a direction I cannot yet predict. 

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#4) On April 18, 2009 at 10:47 PM, ResearchLover (42.05) wrote:

Some say you should always get in to a stock with a target price in mind.  I would check when the stock approaches the target price, looking at technical signals (if you want to maintain growth short term), or fundamentals, e.g. forward P/E (if you are still a believer in the company long term).  More advanced traders look for increasing or stable margins, otherwise they sell right then and there.

 I myself tend to get in to a stock with a target time to reconsider in mind, basing the decision to buy on macroeconomic conditions or trends, and setting the target time to reevaluate when conditions are likely to have materially changed, in a direction I cannot yet predict. 

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#5) On April 18, 2009 at 11:08 PM, getrichdietrying (82.31) wrote:

Target, I have it but you know how it looses focus, I hold though & Sell. I know if I hold year or  more I would gain another 20+%;should I than still hold? Cause just like the rest of our society not humanity I love money. (Makes my world turn...love goes good with it. LOL)

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#6) On April 18, 2009 at 11:11 PM, moerequity (< 20) wrote:

I always have a stop loss, but this is probably not what you are asking. I you are not able to follow a stock position always carry a stop loss. You can then use TA to add to the position or if you feel fundamentals are good you could sell part of your position. No one says you have to sell all.

Another, if you have something you like better.

Moe

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#7) On April 18, 2009 at 11:24 PM, devilinside (77.30) wrote:

The answer is. I have no answer. One mans garbage is another mans gold and one mans gold is another mans garbage. You can ask 100 people about a stock and get 100 different answers.

I don't know what companies your invested in. A good rule of thumb is to check the caps rating of caps members for those particular stocks. Especially Caps All Stars.Than check the finacials for those companies. Remember that even the best of the best are never 100% accurate. Than come to some consciences using the following.

1. Debt - If a company is carrying to much debt it could be in trouble if the dowturn in the economy lingers too long.

2. Management - Do they have a good track record in up and down times.

3. Insider ownership - Are insiders, Officers and Directors buying or selling? They have all the daily stuff that investors won't see until  a) it hits the news (good or bad)  b) the quarterly report comes out. If you wait for either your behind the power curve.

4. Why does this company stand out amung the crowd of other companies in it's sector. What makes them different.

5. Free Cash Flow - It's like your own finacial situation. Is there more cash flowing in than going out?

6. Cash on hand - Most companies are feeling the pinch right now and cash flow may be showing a lose. Do they have enough cash on hand to service debt and operating expenses to get them thru the tuff times. What corrective action are they taking to remedy the situation?

7. This is one of the most important things of all. Never love a stock. Remember you are an investor and if the company is doing things that makes you feel uncomfortable it may be time to get out.

8. Look at the big picture over all. Macro Economics on a world wide scale. We're not just in Kansas anymore Toto.

Once you have come to a conclussion about a company be patient.

I come to TMF for insight from other successful investors about various stocks. Than do my own research and come to my own conclussions on a stock pick. The simple fact is you can't buy them all (Not even Warren Buffet can do that).

If your riding a gain and you are feeling that it's time to get out, than you should get out. But have no regrets if it goes up again. Move on.

If you're in a stock and it's moving against you and there are reasons to believe it's going to continue. Get out, take the lose with no regrets and move on.

I'm sure many others can pipe in here and add more.

I stuggle with the same things that you and others do when making a decision to buy or sell a stock. I have stocks that are up 130% and 145%. And sometimes an urge comes over me to sell and take the gains. I have to step back look at the big picture and ask why I bought the stock. I'm a long term investor and I believe that they will move down from here in the short term, but ultimatley over time they will move higher and my rewards will be greater if I hold and even add to my position when they pull back.

I happen to believe that this market at the moment is overbought and moved to fast against a tide of bad news still to come. So I expect that on a daily basis this market is going to try all our patience.

Happy investing

 

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#8) On April 18, 2009 at 11:38 PM, devilinside (77.30) wrote:

Well as you can see "there's a 1000 ways to leave your lover and a 1000 other reasons to find another"

Have fun, but not too much fun.

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#9) On April 19, 2009 at 12:58 AM, ikkyu2 (99.33) wrote:

This is a tough question, no simple answer.  Here are a few of my thoughts:

1)  If your stock shows you a loss, sell it.  You had an idea it would go up.  Your idea was wrong; it went down.  Get out before your wrongness costs you more.

2)  If your stock shows you a gain, it's a bit tougher. My feeling is that you should always have an opinion on your stock.  If you would not be a buyer of more stock at the current price, then you should start selling it.  Like Yoda says, there is no "hold."  Only "buy" and "sell."

3)  Cramer points out that once your stock has gone up 100%, that's a nice time to sell half of it, and let the remainder ride, a situation he calls "playing with house money."  It's amazing how mentally clearing this maneuver can be.  You feel like you're not at risk, and it frees you to think clearly about the stock and what you want to do with your position. 

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#10) On April 19, 2009 at 2:37 AM, awallejr (83.96) wrote:

1) you should have an exit price already in your mind before buying a stock, otherwise why are you  buying.

2) your reasoning for buying the stock will impact when you sell.  If you bought it for income, then keep it as long as it is producing.  If for capital appreciation, then sell portions of it as it (hopefully) goes up.

3) Always maintain stop losses.

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#11) On April 19, 2009 at 9:09 AM, chk999 (99.97) wrote:

When you have a better place to put the money.

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