when do just give up and take a loss?
08-03-2007, 11:01 AM
#1
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Thread Starter
when do just give up and take a loss?
how do you guess decide when enough is enough and just take the loss? i ask cuz
i got COP at 86, 2 weeks ago... told myself to get out if it went below 81, now its at 78!!! and i have held on
i got RIO at 51.1 2 weeks ago...now its at 46?
I started this account hoping to learn, so its not like i have lost tons of money, but I would like to know what justifications yall use to keep your money in or take the loss and pull out.
i got COP at 86, 2 weeks ago... told myself to get out if it went below 81, now its at 78!!! and i have held on
i got RIO at 51.1 2 weeks ago...now its at 46?
I started this account hoping to learn, so its not like i have lost tons of money, but I would like to know what justifications yall use to keep your money in or take the loss and pull out.
08-03-2007, 11:48 AM
#2
Registered User
It really all depends on your goals.
If you're in the short swing of things yeah you should have some tight stop losses. You hear that all the time here.
However if you're really shooting long term because the ticker has great fundamentals (among many other things but you get the drift) then stick with it.
I have to admit though, that anything greater than 7% long seriously needs to be looked at and analyzed if you don't have a large cash balance.
Personally I like to go long, and my personal tolerance is 5%. I don't have a mega mega portfolio balance. Since I come from a day trading background I look toward my voodoo technical analysis to eek out a couple percent here and there on consolidation or sideways periods. So basically if i see a noticable pull back I'll sell a few shares and come back when it's done for a stock I'm shooting long for.
In the end there is that saying that it all depends how much your stomach can take.
Oh yeah and there is that other saying that is "Leave your emotions at the door". Something i admit is hard to do :-)
Cramer always says that in times of weakness (like these for your stocks) you might want to strengthen your position (if the hw proves such).
If you're in the short swing of things yeah you should have some tight stop losses. You hear that all the time here.
However if you're really shooting long term because the ticker has great fundamentals (among many other things but you get the drift) then stick with it.
I have to admit though, that anything greater than 7% long seriously needs to be looked at and analyzed if you don't have a large cash balance.
Personally I like to go long, and my personal tolerance is 5%. I don't have a mega mega portfolio balance. Since I come from a day trading background I look toward my voodoo technical analysis to eek out a couple percent here and there on consolidation or sideways periods. So basically if i see a noticable pull back I'll sell a few shares and come back when it's done for a stock I'm shooting long for.
In the end there is that saying that it all depends how much your stomach can take.
Oh yeah and there is that other saying that is "Leave your emotions at the door". Something i admit is hard to do :-)
Cramer always says that in times of weakness (like these for your stocks) you might want to strengthen your position (if the hw proves such).
08-03-2007, 03:26 PM
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It's pretty simple.
Would you buy more right now if you could? No? Then why are you still in the stock? You think someone else who isn't even down is going to be more willing to buy than you? Reality check.
If you are in the wrong sector, get out. If the market falls 3% and so does your portfolio, that's pretty normal.
If you aren't adjusting, say moving in to what is working like Under Armor or whatever, than you should either take your losses or get out.
Is anyone substantially buying less gas than before? That isn't the whole picture but oil and gas will come back. Some faster than others.
Read my post about what's actually happening I wrote yesterday.
RIO isn't going to grow anytime soon. If you want to see it if comes back a little before selling, that's your choice, but you sure as hell better have a better reason than "hope".
COP will be fine, but there is no way to tell you how long it will be before it recovers.
Be thankful, you are going to learn a huge amount about the market in the next few weeks. Analyze the media closely and pay attention to what CEO's/CFO's are saying now so in the future you'll know what's coming when you have real $$$ in the market. Anyone listen to ol' Bear today..
Would you buy more right now if you could? No? Then why are you still in the stock? You think someone else who isn't even down is going to be more willing to buy than you? Reality check.
If you are in the wrong sector, get out. If the market falls 3% and so does your portfolio, that's pretty normal.
If you aren't adjusting, say moving in to what is working like Under Armor or whatever, than you should either take your losses or get out.
Is anyone substantially buying less gas than before? That isn't the whole picture but oil and gas will come back. Some faster than others.
Read my post about what's actually happening I wrote yesterday.
RIO isn't going to grow anytime soon. If you want to see it if comes back a little before selling, that's your choice, but you sure as hell better have a better reason than "hope".
COP will be fine, but there is no way to tell you how long it will be before it recovers.
Be thankful, you are going to learn a huge amount about the market in the next few weeks. Analyze the media closely and pay attention to what CEO's/CFO's are saying now so in the future you'll know what's coming when you have real $$$ in the market. Anyone listen to ol' Bear today..
08-03-2007, 05:55 PM
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man I'm down over 12% in my portfoilo, if you still believe in your stocks add more into your positon. I'm adding more money into my portfilos next week so I'll cut my lose down to 5-6%.
The stock market are doing bad because of the subprime issues. I think after everything settles down you'll come back. I like my companies so I'll take my chances and add more into my positons, this is my longterm account so i can handle the abuse I'm getting right now.
I believe RIO is a good company and there suppose to be splitting the shares pretty soon, maybe then add more into RIO.
You bought into your stocks on the highside just as I did, thinking it would go higher but I was wrong. Got into TCk at 52.05 now it's 45.56 , GG got into at 27.50 now it's 24.87 and AAPl at 142.23 now it's 131.75.
Guess were all riding on a crazy ass roller coaster, also I'm still half cash so I got plenty of room to play around with.
The stock market are doing bad because of the subprime issues. I think after everything settles down you'll come back. I like my companies so I'll take my chances and add more into my positons, this is my longterm account so i can handle the abuse I'm getting right now.
I believe RIO is a good company and there suppose to be splitting the shares pretty soon, maybe then add more into RIO.
You bought into your stocks on the highside just as I did, thinking it would go higher but I was wrong. Got into TCk at 52.05 now it's 45.56 , GG got into at 27.50 now it's 24.87 and AAPl at 142.23 now it's 131.75.
Guess were all riding on a crazy ass roller coaster, also I'm still half cash so I got plenty of room to play around with.
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08-03-2007, 08:11 PM
#8
Administrator
Stops are not a good idea, you are just locking in losses.
Taking a loss and pulling out teaches you nothing. If you want to learn then make an attempt to turn your situation around or at least stop losing money. Sell COP Monday to get some cash and use it to buy SH. SH is the S&P500 short ETF. It goes up when the S&P500 goes down. That's called a hedge. It's a contra position to RIO and should offset further losses.
I understand you've lost some money but you haven't lost all of it. You are still in the game so if you want to learn how to deal with down markets this is a great opportunity. This is a time where the men and the boys part company. Gather yourself up and play by the new rules. Switching COP to SH will stop your losses in both positions. You won't make any money but you'll stop losing it which is a very valuable skill to learn.
Taking a loss and pulling out teaches you nothing. If you want to learn then make an attempt to turn your situation around or at least stop losing money. Sell COP Monday to get some cash and use it to buy SH. SH is the S&P500 short ETF. It goes up when the S&P500 goes down. That's called a hedge. It's a contra position to RIO and should offset further losses.
I understand you've lost some money but you haven't lost all of it. You are still in the game so if you want to learn how to deal with down markets this is a great opportunity. This is a time where the men and the boys part company. Gather yourself up and play by the new rules. Switching COP to SH will stop your losses in both positions. You won't make any money but you'll stop losing it which is a very valuable skill to learn.
08-04-2007, 12:39 AM
#10
Administrator
In all seriousness, I have no idea what is going to happen Monday. It could be a great day, it could be a disaster. There are a number of choices open to you which involve selling one, none or both positions.
The best I can offer is my take on the fundamentals. COP is integrated oil. While the numbers for all the major oil companies were "good" there was one major on-financial problem shared by all of them. They all had lower than expected production. Big oil lives or dies on increasing production numbers. To sell more they need to pump more out of the ground. They can't grow through expansion, only through pumping more oil and by selling it at a higher price. When COP, XOM, CVX and BP all report lower production then there are disruptions in the production side, probably due to geopolitics. They haven't been drilling enough to make up for what they are losing in Nigeria and Venezuela.
RIO is a miner of Iron and Nickel, #2 and #1 respectively worldwide. It remains strong both on demand for the product and the supply. Prices remain strong. It's in great shape. It is however expensive and it has made a lot of investors a lot of money over the past year. The hit it's taking now is not fundamental to it's business, it's a feature of the stock. The whole market is driving it down. Hedge funds who need cash are selling it off and taking profits.
Between the two I like RIO more than COP and I think it's strong fundamental business will cause it to bounce back faster. RIO can move from 46 to 51 in only a few days. It could take weeks or months for COP to fully recover.
I would sell COP and either buy SH if you think the market is going down more to protect your RIO or take half of the proceeds of the COP sale and buy more RIO to position yourself for a larger gain when it recovers if you think we've pretty much hit bottom. As I said I think it could go either way at this point, flip a coin.
The SH trade works like this: SH is a contra to the S&P500. If you think the S&P500 is going to get hit for another 5% decline, and it may when the other investment banks report, then your RIO will probably get hit again down to 42-43. However your SH will go up by 5%. Once than happens you can sell the SH and take the money and the profit and put it into RIO at $42 lowering your avg cost basis to 46 or so. You're now at the bottom of the market and only down a few dollars on your stock. You haven't made any money but you have put yourself in a much better position to make some. The RIO/SH trade is not a perfect hedge so you could still lose money if the price of RIO either drops faster than the S&P500 or if it rises more slowly. However your risk is loss is substantially reduced.
Getting flushed out of the market at the bottom for a loss shouldn't really be an option for you. Stay in it and you'll eventually do fine. Your losses are not yet significant. Don't start panicking until you are down more than 25%. You are still in single digit losses. That's just normal given the situation.
The best I can offer is my take on the fundamentals. COP is integrated oil. While the numbers for all the major oil companies were "good" there was one major on-financial problem shared by all of them. They all had lower than expected production. Big oil lives or dies on increasing production numbers. To sell more they need to pump more out of the ground. They can't grow through expansion, only through pumping more oil and by selling it at a higher price. When COP, XOM, CVX and BP all report lower production then there are disruptions in the production side, probably due to geopolitics. They haven't been drilling enough to make up for what they are losing in Nigeria and Venezuela.
RIO is a miner of Iron and Nickel, #2 and #1 respectively worldwide. It remains strong both on demand for the product and the supply. Prices remain strong. It's in great shape. It is however expensive and it has made a lot of investors a lot of money over the past year. The hit it's taking now is not fundamental to it's business, it's a feature of the stock. The whole market is driving it down. Hedge funds who need cash are selling it off and taking profits.
Between the two I like RIO more than COP and I think it's strong fundamental business will cause it to bounce back faster. RIO can move from 46 to 51 in only a few days. It could take weeks or months for COP to fully recover.
I would sell COP and either buy SH if you think the market is going down more to protect your RIO or take half of the proceeds of the COP sale and buy more RIO to position yourself for a larger gain when it recovers if you think we've pretty much hit bottom. As I said I think it could go either way at this point, flip a coin.
The SH trade works like this: SH is a contra to the S&P500. If you think the S&P500 is going to get hit for another 5% decline, and it may when the other investment banks report, then your RIO will probably get hit again down to 42-43. However your SH will go up by 5%. Once than happens you can sell the SH and take the money and the profit and put it into RIO at $42 lowering your avg cost basis to 46 or so. You're now at the bottom of the market and only down a few dollars on your stock. You haven't made any money but you have put yourself in a much better position to make some. The RIO/SH trade is not a perfect hedge so you could still lose money if the price of RIO either drops faster than the S&P500 or if it rises more slowly. However your risk is loss is substantially reduced.
Getting flushed out of the market at the bottom for a loss shouldn't really be an option for you. Stay in it and you'll eventually do fine. Your losses are not yet significant. Don't start panicking until you are down more than 25%. You are still in single digit losses. That's just normal given the situation.