Forum Archive Index - February 2004

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Stephen,
 
>
>I thought this might stimulate some discussion on the perennial topic
>"when to sell".
> 
>Here's my tale.
> 
>I started buying shares for the first time in June 2003.
> 
>A month ago I was feeling very clever indeed. My mixture of BCA, 
DPC,
>POT, MHI, WRI and WHS was up 14% + dividends - not bad for a 
>beginner.
>

A fairly sensible collection of shares, albeit skewed rather heavily 
towards retail and financial services.    

> 
>Today I sold WRI and WHS, anticipating further decline, at a 13 and
>15% loss respectively. I'm still in the black overall, but not feeling
>nearly so clever.
>

Did you invest knowing that you would *need* to sell out again within a 
few months?     

> 
>I'm guilty of having abandoned my own plan, which was to follow the
>maxim "sell if you're confident you can buy back in later at a better
>price". I actually did think that about two weeks ago, and should have
>acted then.
>

So you predicted the greatest natural disaster to hit New Zealand in 
seventy years?    Well done.   Pity you didn't tell the lower North Island 
farmers that!   Could have saved them a lot of lost stock!

I can spot the obvious flaw in your plan - overconfidence!     Trading on 
'gut feeling' is an almost certain way to underperform.
 
>
>Since I'm still in experimental mode, I haven't committed all that I
>might to the market, so it hasn't been as hard a lesson as it might
>have been.
> 
>On the menu for investigation: GPG, HQP, FRE, MFT, RNS, PVO, 
>buying more MHI should it dip, and learning more about ASX stocks.
> 

Possibly some good shares in there, but on a value for money basis 
they are all inferior to the two you just sold.   I think you need to learn a 
bit more about valuing shares.

Try this for a strategy.   Be greedy when others are fearful, and fearful 
when others are greedy.   Works for me, and another chap with the 
initials WB I think.

SNOOPY




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