Forum Archive Index - June 2001

["Matthew Van Veen" <mattvanveen@hotmail.com>]

Yes Snoopy - here is mine.

Thanks Peter for a fantastic post.I have printed it out and have stuck it in 
my personal education investment folder.
I admit to not having traded originally with any stop losses and was always 
caught in the " couldn't now sell for a loss" scenerio.
I now use Darryl Guppies 2% rule which limits any loss. However one still 
has to be disciplined as when it broke through it on my FFS, I did not sell 
as I was caught on this stock with the hype as like others I guest. That was 
a mistake and proved that stop losses are there for a reason and I would of 
been better off selling when it told me too and buying back later on if I 
had to. I would of been better off and not now sitting on a loss for this 
share. The "Learning to Invest" series is right up there with the best 
education on investing you can get.

Matt


>From: "tennyson@caverock.net.nz" <tennyson@caverock.net.nz>
>Reply-To: sharechat@sharechat.co.nz
>To: sharechat@sharechat.co.nz
>Subject: Re: [sharechat] LEARNING TO INVEST>>>Disciplined Investment Deci
>Date: Wed, 27 Jun 2001 00:15:45 +0000
>
>Hi Peter,
>
>Great article and I think probably most of us saw our own reflection
>in the mirror at some point while reading it!
>
>You are dead right about selling being the harder decision than
>buying too!
>
>I use slightly different 'rules of thumb' to what you are suggesting.
>
>I have a six monthly  and annual review.
>
>I pay particular attention to my 'best' returns as it is surprising
>how often a share can get overhyped one year and tank the next!   I
>don't often sell at the peak mind you, but I do make sure that the
>good performance is at least possibly sustainable into the future.
>
>My other rule of thumb, with no particular time frame on it, is that
>any company I buy into must have a realistic chance of improving
>profits to the extent of giving me a compounded 40% return (in share
>price appreciation and dividends) over the next business cycle.  If
>this doesn't seem likely, then I don't buy.   And if it gets there, I
>have a darn good look at selling out.   Circumstances may have
>changed to the extent that I choose not to sell out but I do at least
>make the sell/hold decision at that point.
>
>On the rare occasion when I do choose to sell at a loss, I try to
>put that money into something else slightly cyclical that will at
>least give me a fighting chance of earning my capital back.  Putting
>you crystallized loss back into something that has a better chance of
>recovery than what you sold out from, I find, eases the pain of the
>loss.
>
>I don't use a stop loss strategy as such, but I do buy in the
>knowledge that what I have bought may drop in value by 20% or so.
>I think it is important to be able to handle this sort of paper loss
>(which is a real loss).  Usually I find things improve in due course
>if you did the right homework before the original purchase!
>
>Anyone else got any other 'sell' rules of thumb they would like to
>share?
>
>SNOOPY
>
>
>---------------------------------
>Message sent by Snoopy
>e-mail  tennyson@caverock.net.nz
>on Pegasus Mail version 2.55
>----------------------------------
>"You can tell me I'm wrong twice,
>but that still only makes me wrong once."
>
>
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