perspective

I was on the wrong side - those stops were loss limits so the stock got sold and then within a very short time the price shot back up. I saw what was happening and bought them back but still lost money in the transactions. This is of the ways high speed trading can impact us directly. I’ve got some crazy low buys every 60 days in for JNJ, DIS and INTC but of course those never get executed

I was on the wrong side - those stops were loss limits so the stock got sold and then within a very short time the price shot back up.

The idea of setting up stop loss limits never made any sense to me if you are an investor. Buy a stock if you believe it is undervalued. Hold the stock until a) it is not longer undervalued (sell), or b) another stock becomes more undervalued (i.e. switch into that one). If you believe it to be undervalued and you get no new information, then if it drops it becomes even more undervalued. In this situation, why would any sane person leave an offer to sell on the table? You’re basically letting other people’s opinion override your own at the worst possible moment.

In my opinion, people use stop loss limits for 3 reasons.

  1. They are traders, not investors.

  2. They don’t understand the value of the companies that they own which can make them more sensitive to other people’s opinion of value (i.e. market price).

  3. They are risk averse. Their fear of loss overwhelms logic and their own analysis.

We are seeing crazy volatility levels. It is like shareholders are up in a tree holding on to the branches. The volatility is like the wind shaking the tree. The more intense the wind, the more of the shareholders will be shaken out.

Chris

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<The idea of setting up stop loss limits never made any sense to me if you are an investor. Buy a stock if you believe it is undervalued. Hold the stock until a) it is not longer undervalued (sell), or b) another stock becomes more undervalued (i.e. switch into that one). If you believe it to be undervalued and you get no new information, then if it drops it becomes even more undervalued. In this situation, why would any sane person leave an offer to sell on the table? You’re basically letting other people’s opinion override your own at the worst possible moment.>

REC+1…Very good point Chris, it bears repeating.
The craps tables are down on the boat, do not throw your hard earned money at a stock unless you are willing to see a 20% drop without selling it is my attitude. Talking volatility here only not the fundamentals of the company.
Also; wait till the dust settles on this mess, the ETF’s and Mutual Funds had to sell several dump truck loads of stock to sell today and that is what drove the market down late after clawing back some ground early on. That is my guess anyway.
This may be a good time to take a close look at your watch list and see which ones rose late morning- early afternoon. I would venture to say many or most of those stocks will be the ones to recover strongly when the time comes. I noticed AAPL was one of those, anyone note others that also did?

Chris,
I did use stop loss for a few stocks that I was looking to dump (because they were over valued), but were still climbing.

Sometimes it worked out (climbed above current sell point), and other times it did not (would have gotten more if sold it when I placed the stop loss).

Methinks being more decisive (sell as soon as I decide I no longer want the stock) is a better approach. It probably hurt me with the opportunity cost (what I could have bought instead of waiting for the stop loss to trigger).

-Bob

Soy,

I saw AMBA, SWKS, and SEDG green intraday. When the market settles for good, perhaps these are what I’m going to pick up. (plus INFN, SKXS, and the list goes on…)

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Unless I am missing something, Mr Market seems to be going up and down :slight_smile: some pretty wild swings too.

Crazy fun…not.

No selling or buying for me just now.

Something I have learned from Saul is that I have freedom of choice.
By that I mean I don’t have to hold forever and I can change my mind
when I think I should about continuing to hold or selling and moving on to something better.

I need the choices that TMF provide. And the discussion boards are great. As are the thesis commentaries and the updates and best buy now recommendations…and what certain people have to say about a particular stock…but it still has to be me that makes the decisions.

I will just have to stay invested in the companies that seem to be the right ones to stay invested in…another lesson from Saul: stay invested and don’t try to know when to get out or back in to a correcting or down-turning market.

So far I have chosen more good ones than bad ones…otherwise I would be broke…but I am always looking to learn how to do better and hoping I won’t make too many mistakes.

Steady as she goes,
Frank.

PS thanks to all for your input

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