as214
184 posts
msg #50140
- Ignore as214 |
2/20/2007 12:28:39 PM
TheRumpledOne
- Ignore TheRumpledOne 2/17/2007 2:16:57 PM
"Here is my real time post of ZEUS purchase as a beaten down value oriented contrarian selection. After I bought it ZEUS went down over 10 percent on me but because the risk /reward ratio was favorable I held it . Now just a little over two months later ZEUS is up over 20 percent from my origional buy point. "
Nice trading!
I think the questions people want answered are:
"HOW MUCH OF A DRAW DOWN WERE YOU WILLING TO WITHSTAND?"
"HOW LONG BEFORE YOU BAILED"?
"WHAT WAS YOUR EXACT TRADING PLAN FOR THIS TRADE?"
...
ZEUS 12/5/06 OPEN $25.52 CLOSE $24.77 RSI(2) SHOWING 2 DAY POSITIVE DIVERGENCE
ZEUS 12/7/06 HIGH $26.25 CLOSE $26.11 Peaking at EMA(13), EMA(26) AND CLOSING BELOW MA(50) You could have taken profit off the table in 2 days.
One alternative would have been to sell 1/2 your position and lock in some profit and put a stop at breakeven for the remaining position. If you get stopped out you can always reenter the trade when approritate. This is NOT a criticism of your trade!
Thanks for the advice RTO. Here are my answers:
As far as the drawdowns go, I don't have a set percentage. I focus on individual stories that have been misappraised and trading at at least a 40 % discount to their intrinsic values. I will bail out only if something changes to the extreme negative with the company, or if there is scandal that has recently occured. Other than that I am holding for one year minimum, or I'll sell if equity appreciates to its true value prior to a year. I am a very patient man. I am in the upper tax bracket so after one year I am only paying 15 % on gains, as opposed to about 40% short term by the time NY state and the Feds get through with me..
As for ZEUS my plan was simple. I bought it in conjunction with my Vector Vest contrarian value selection methodology which is posted here. The most undervalued stock in the most undervalued industry must be close to a bottom.
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limestar
79 posts
msg #50142
- Ignore limestar |
2/20/2007 2:31:01 PM
Your link to the strategy didn't post.
I think market timing is a big factor here for overall % gain, no?
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TheRumpledOne
6,411 posts
msg #50163
- Ignore TheRumpledOne |
2/20/2007 11:52:12 PM
as214:
Thanks for your reply.
If you don't have a preset plan, then how do you keep EMOTIONS out of your exit decisions? I am sure someone may want to follow in your footsteps.
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astroanalyst
48 posts
msg #50167
- Ignore astroanalyst |
2/21/2007 5:58:38 PM
FWIW, given "stop hunting" and other MM chicanery, "married" puts could offer a better alternative to those seeking some insurance...
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as214
184 posts
msg #50171
- Ignore as214 |
2/21/2007 11:21:15 PM
ZEUS up another 2.5 % today!
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as214
184 posts
msg #50172
- Ignore as214 |
2/21/2007 11:27:21 PM
Hi Rumpled,
How do I keep my emotions out of it simple..there is a positive to being of only average intelligence LOL. It forces me to look at things in black and white, either something is or it isn't. Warren Buffett said any IQ over 125 when investing is a waste. Take ZEUS now for example, extremely undervalued stock in extremely undervalued industry when I bought. When do I sell? When ZEUS reaches it's true value, or it's industry reaches its true value I might unload..not before that. I don't care or try to guess what the "market" is doing, it's a waste of time and that sole reason of people trying to guess market direction is the single biggest factor for lost profits. Another thing that might catch my attention is extreme insider selling!
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TheRumpledOne
6,411 posts
msg #50173
- Ignore TheRumpledOne |
2/22/2007 1:06:38 AM
"When do I sell? When ZEUS reaches it's true value, or it's industry reaches its true value I might unload..not before that."
You could be giving up a lot of profit in the meantime. Once again, you can hold a "core" position and trade the rest using something simple like RSI(2) and EMA(5) to time your entries/exits. But if it is working for you, you are making a profit and you are happy with the results then HAT'S OFF TO YOU!
MAY ALL YOUR FILLS BE COMPLETE.
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