“I should have been buying, when I was selling.”
Comments from readers:
“I don’t use stop losses, because I’m pretty careful as to what I buy.”
“Stop losses have cost me plenty in this up and down market.”
“No one can predict this, or any market. Stop beating yourself up because you made a mistake with Apple.
My theory of stop losses is that they bring discipline and they work — for me (most of the time).
When a stock falls, the first question you ask yourself is “Why?”
Some answers will change the reason you bought the stock. Some won’t. Some you won’t know — like Walmart’s Mexico mess or even Apple’s drop. Most of the analysts were saying that Apple didn’t sell a lot of iPhones, because Verizon and AT&T didn’t. But other cell carriers made up the numbers and helped blow away Apple’s numbers.
You don’t need to stick with an inviolate stop loss number — like 15%, or 8%. You can have different numbers for different stocks in different markets.
When we did our studies years ago, we found that a 15% stop loss on balance saved. Of course, there were some stocks like Apple which bounced back. But most didn’t. Hence the overall savings.
Discipline versus faith. Your choice.
AT&T Will Unlock Out-of-Contract iPhones. Click here. Verizon will also unlock its world phones. Call them and beg.
If your Windows clipboard no longer works. It means you’ve run out of memory. You probably have much software open simultaneously. Close some. The big memory hog is your browser, especially if you have many windows open to different Internet sites. Close some down.
Barnes and Noble has a new light-up, glow-in-the dark e-reader. It gets a good review by David Pogue in today’s New York Times. The problem is when you buy a reader you commit to a supplier, like Amazon or Barnes and Noble. Personally I prefer Amazon. For Pogue’s piece, click here.
Favorite recent New Yorker cartoons.
Harry Newton who wonders why at nearly 70 he can’t hit the tennis ball as hard as Nadal and when he tried he injures his shoulder rotator cuff, when then needs icing and rest, which is boring.
I haven’t figured how to make the Comments typeface bigger. But you can make your reading easier if you hit Ctrl and + (plus key) simultaneously. You make the type smaller by hitting Ctrl– (minus).
Boy, you can waste a lot of time listening to corporate presentations that, in the end, suck. But that’s the nature of this business.
I don’t like what’s happening in Europe. England is now officially in recession, also.
Harry, not only did you blow it on Apple, but you cost anyone who listened to you a lot of $$$. I posted on here the night before Apple reported that you were wrong, that the numbers will be good. How did I know? That's for me to keep to myself. But I'm making mint doing the opposite of what you recommend.
So does your stop loss on AAPL start out at from where you got back in and sit 15% below, or is it different now?
stop loss should be renamed “stop profit”, LOL
There is a pretty obvious lesson for us in observing what's happening in both Europe and the UK, Paul Krugman not withstanding. Get government out of the way and let individual initiative, i.e., entrepreneurs like Harry once was, do their magic; creating, modifying, attacking and changing for the better things to meet needs. And in so doing, create a growing economy. Government and more government is not the answer; it's the problem.
You can also hold CTRL and roll your mouse wheel. Works in MS office products too.
Here's a great article on active vs passive investing:
http://www.ifa.com/articles/Ac…
The discipline you need, Harry is to not trade individual stocks or options. They are a loser's game. If you give 90% of your assets to a passive index manager, like ifa.com, then you can satisfy your Vegas addiction with the remaining 10%. The problem with you in markets is that you are a smart guy. Smart guys think that they are so smart they can figure out how to time the market and make money. This is NOT true and never has been (I can quote the research on this). Your stop loss orders are a serious tell that you're a gambler. Stop loss orders would never allow you to make 4500% on Apple over the years, or QCOM, or any stock.
Harry, You bought Apple and it went up. You sold (some or) all of it when it came down. So ? Did you make a profit ? What is the problem? If you are the type of trader that buys and sells all at once then you are completely out and ready to buy again. If you bought in at various times/prices then you can get out of some at X%, Y% and Z%. This way you may have gotten out of X or Y but still be in for Z. If it runs up and drops like a rock then you will be out Z and very happy. If it runs way up you still have a horse in the race and are still happy. Discipline is the Key