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What goes up ..................
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Well, you have all heard it time and time again. "What goes up must come down." While that is definitely true for gravity, it is not completely true for stockpicking. There are hot sectors and hot stocks that can go up, it seems, for an infinite amount of time. Every time you look at them, they are still climbing and you wonder when it will ever end. My experience with that type of stock is mainly when I have not invested a penny in it. In other words, I kick myself everyday when I look at the quotes and see the stock "up again" and I did not know when to take a position. I wish I had more of these experiences when I actually invested, but that is not nearly as common as the "kick me" stock described above. One of the reasons that I do not have such a great experience for stocks I am invested in is that I believe in taking profits before you get squashed. Jim Cramer has such an expression when he says "Pigs get slaughtered." While I do not have such an aversion to being a pig as Mr. Cramer, I do recognize that the only stock you make money on is one you actually sell at a higher price than you bought. (Please forgive me all you dividend buffs out there, I do know that dividends can alter that simple equation.) It is with this in mind that I plan to sell parts of several positions where I either have a nice gain already, or I anticipate a larger loss if I wait. I will be selling about 1/3 of my position in AAPL and 1/2 of my position in MOS. In those stocks I have a decent gain and want to take some profits. In addition, I will sell part of my positions in NVDA and all of my position in BBY. There was a nice gain in BBY recently and I would love to "escape" without further losses. I still believe in the retail sector long-term. but the short-term picture is simply too dark for this time shortened game. I may return later or I might not even get out because my "limit order" is too high. My hope is to take advantage of another decent stock day and "escape" at a slightly higher level for BBY and NVDA. One thought on MOS and POT and others in the "AG" sector: THESE STOCKS ARE OVERBOUGHT IN MY VIEW !!!!! My advice is to save yourself and take some profits. This is a real life example where some "Pigs" are going to get slaughtered. I recommend taking profits and waiting for a pullback before considering buying more. Based on the worldwide shortage of food, I think these stocks will do well over time even from these high levels. However, there is likely going to be a sector correction soon and I suggest getting out of the way! I feel so strongly about this that I almost decided to sell my entire MOS position. Experience has taught me that even a savy investor cannot predict accurately the turns in a sector or when a hot sector will cool off. Therefore, this is only an educated "guess". Further, to mitigate my volitility in any down move, I plan to buy large positions in ultra-short ETFs for the Nasdaq and financials. Again, I might be wrong in my prediction for a downward move, but in a stockpicking game (or real life) you need to have the courage of your convictions and act on them. (As long as you utilize discipline and logic as you go.) We will see how these moves work out over the next week or so. I will report back then. Doc | ||
