Hi Ed,
I guess we just think about it differently. I never, ever, EVER, sell a stock just because it’s gone up (unless it’s become too large a part of my portfolio, in which case I will just trim it 5 or 10 percent.
I never sell because of good news. (That reminds me of that mindless person who wrote on a MF board, after a stock had fallen because of had had terrible quarterly results, “Should I buy now because of the bad news?”)
Here are some relevant quotes from the KB on trying to time these things that you might want to reread.
Best,
Saul
Never miss getting into a stock because you are waiting to buy it a few cents cheaper. The decision is whether you want to invest in it or not. Once you decide, take a starter position, at least. Don’t wait around for a slightly better price. When it’s at $50, I can guarantee that you won’t remember or care whether you paid $10.05 or $10.30, but you’ll be kicking yourself if you didn’t get in. The issue is: Do you want to buy the stock? If the answer is yes, don’t fool around trying to buy it a bit cheaper. You are buying with a long-term perspective.
I assume that any good stock I might want to buy probably traded at a lower price some time before I found out about it… Duh… But so what? I can’t go back and buy it in the past. What I care about is whether the stock is a good buy now. I see too many people who are “waiting” for a price to go back to where it had been, for a lower price, a better buy in point, or whatever. They may get it and save a $1 or $2, or they may miss getting in, and miss a $50 eventual rise in the stock. Don’t try to wait for the price to go down before getting into a stock. Geez, you are getting into it in the first place because you think the price will go up, not down. If you like it and are convinced, at least take a starter position now.
I definitely don’t sell winners just because they have had a run (not as a policy, anyway). I only sell if I have a specific reason.
On trading in and out: No one knows how long a stock price can keep climbing. If you sell now at $135 it could keep going up to $200 before it takes a rest. When it was up $15 from where you sold, would you buy back in or just watch it go? And if you timed it right and sold now, and it dropped $15 would you get back in, or would you wait for down $20? And then if it got to down $19 and started back up, would you panic at down $12 and buy back in? And then, what if it goes down $10 from there? Do you buy, sell or hold? In other words, trying to time the market in these stocks will drive you crazy. If you don’t have a good reason to sell just stay with it and enjoy the ride.