Do I sell and take that huge a loss or do I just ride it out?
Hi Money. You have to make your own decisions, but I’m not sure why you are considering selling those particular stocks. Because you bought them higher? That’s the only reason you give in your post, but you must have some other reason that made you change your mind about them. Did you hear any bad news about them since you bought them? Did they issue any pessimistic press releases? Has there been any company-specific bad or threatening news about them since you bought them that has caused you to change your mind? Or do you just have a bad intuitive feeling about one or more of them? (I personally have certainly been known to act on intuitive feelings, and even sell out of stocks because of bad feeling, so I can’t argue with that, but I’m just asking if you have any actual reasons).
How have I handled this situation? That’s a good question.
I bought Nectar at $103 and it soon dropped down to $82, and it never occurred to me to sell it, even though it was down 20%. I was only wondering if I should add at that point but I decided not to because I already had a big enough position, and I considered it as a speculation of sorts.
Alteryx dropped from $38.50 to $30.65, also down 20% on news that I evaluated, read about, and then decided didn’t warrant the drop, and I added a little right near the bottom. Now this wasn’t down from where I bought it I admit, but from where it had been. But I was buying the company, not the stock price.
Shopify, your third stock, has had several 20% drops since I bought it, but as of last Friday it was at 470% of where I bought it. I did trim it when it got to be too large a position, and I have trimmed it at other times when I needed small amounts of cash, but it’s still in 3rd place at about a 12% position.
How long is long?
Certainly longer than a couple of months.
By the way, as I’m writing this I see that Shopify is up $9 today, or 7.5%, AYX is up 2.75% today and Nectar is up 2.9% so far today. I hope you didn’t sell them all at the bottom.