I was thinking over the weekend that because NKTR was up 10% Friday, now at 90.35, that by putting a stop at $87 would save me a little of the gains. I think I am just below breaking even as it is. There again this might be a buy and hold for a lot longer.
The ASCO presentation didn’t look like a binary event (huge breakthrough or zero results from trials). Perhaps the Friday gain was a result of the NKTR-181 application to get FDA approval, not the preliminary abstract for the ASCO conference or the hopes the final abstract would be great.
Moneyslob-
In my opinion, putting a stop in at $87 is a horrible idea. This stock makes drastic moves, so putting a stop in at $87 means you will most likely be selling it at $87 soon. If you don’t want to own the stock, sell in now at $90 and make the extra $3/share. If the stock opens down big tomorrow, and you have a stop in at $87, you might sell it for much lower than $87.
Just my opinion.
Jimbo
9 Likes
In my opinion, putting a stop in at $87 is a horrible idea.
Spot on, Jimbo. If you are not prepared for NKTR to get a 40-50% haircut, or add 50% in value only to come back to present levels, you probably shouldn’t be holding the stock. Misinterpretation of clinical data among “analysts” is the norm in biotech; not the exception. In fact, in my experience, taking advantage of these misunderstandings is the key to making $ in biotech.
Cosmid
2 Likes
Moneyslob-
In my opinion, putting a stop in at $87 is a horrible idea. This stock makes drastic moves, so putting a stop in at $87 means you will most likely be selling it at $87 soon. If you don’t want to own the stock, sell in now at $90 and make the extra $3/share. If the stock opens down big tomorrow, and you have a stop in at $87, you might sell it for much lower than $87. – Jimbo
Just to add to what Jimbo said, Moneyslob, I’d suggest this:
- Look in the mirror and slap yourself.
- Then say “Never ever even think about stock stops again!”
- Make a little sign to put over your computer screen that says the same thing, but also adds “And if tempted to do so, go back to the mirror and keep slapping until the feeling goes away!”
Seriously, stops… especially with a volatile stock (which is most of them discussed here)… pretty much guarantee you’ve locked in less than you could have had. If NKTR is worth owning, own it. What if it dips to your stop and your stock sells… and the share price keeps rising? Are you going to have the guts to buy back in at that higher price? And then will you keep capping your gains with stops? Do you say “I bought at $100 and I’ll put in a stop at $95 just to protect me.” All you’ve done is give yourself a great chance to take an unnecessary loss and then miss the upside you invested for.
And they don’t necessarily offer protection. If there is a really big drop, the stock will keep dropping right past your so-called stop and you’ll just end up selling extra low.
If you want to sell, sell. But don’t count on your broker to “save” you if the stock drops.
Investing for 52 years and counting… and offering investing opinions in recent years…
Oh yeah. If you have an “investing” book that advocates stops, this would be a good time to throw it away. 
Rob
Rule Breaker / Market Pass Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
35 Likes
How do you really feel about stops, Rob?
Pretty sure Saul shares those thoughts.
Yeah. I’m being too subtle I guess.
Rob
Rule Breaker / Market Pass Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
1 Like
It’s all good, thank you.
John
Then say “Never ever even think about stock stops again!”
I have to agree with BreakerRob. If you want out, sell, but putting in a stop just about guarantees you’ll be sold out at a lower price than you can get right now.
Saul
OK, literally Monday morning quarterbacking here…
So the stop order probably would have gotten you out at around $60 - nowhere near $87. But you could buy back those shares right now around $55. If in a taxable account, your loss would be washed out by the within 30 day repurchase, but you would nevertheless have lowered your basis.
That all said, the advice here was correct in that what you were attempting to do (protect some small gains) would have failed miserably.
3 Likes
Yes. I understand now. I didn’t do anything so it is going to be maybe a long run to get back to even or above. My heroes on this forum seem to think it will.
John
Yes. I understand now. I didn’t do anything so it is going to be maybe a long run to get back to even or above. My heroes on this forum seem to think it will.
John,
If you can get away from this thinking about getting back to even, you will probably be able to make better investing decisions. Think of getting back to even as irrelevant. As Rob would say…go to your mirror and slap yourself in the face a few more times. The thinking should be which stocks should I be in TODAY to do the best GOING FORWARD. Thinking about recovering losses or locking in gains will lead you to sub optional decisions at best and bad decisions at worst.
Chris
28 Likes
Thanks. I know that. But going to stay with this stock for a little longer.
Note to self:
Get out of a stock right before closing not at next opening.
I would have been hosed setting a sell at Monday opening. It was down to $67 in off market trading.
Oh yeah. If you have an “investing” book that advocates stops, this would be a good time to throw it away.
Use it as a door “stop” to remind you what a stop is for
Mike
2 Likes
Remember, there are two kinds of stop loss orders: market and limit. Which were you thinking. On a limit, you might have put in a stop at $87 with a limit of $84 (don’t sell if it is below $84). In that case the stop lost would have done you no good. If it were a stop market, you would have sold at the opening price, which was somewhere near $63, much better than the closing around $52.57.
But instead of thinking of how you could have saved $10/share, think about what has been said on this board about the results. Saul gained enough confidence to buy a large amount more. What if the analysis here is right and the market realized it in 1,2, 4 weeks - and stock is back at $65. You might not have enough confidence to buy back at that point. Then 3 weeks after that we are at $72. Can’t buy now. Then $80 in 4 weeks. Gosh, I would feel dumb buying back. Maybe it is all for the best and you will be in it when it hits $110 again. Maybe.
1 Like