After about 3 decades of following TMF, I finally decided to try subscribing to Stock Advisor in late 2020, and use this to guide a tax-advantaged account where I was willing to take some risk. Things went alright for awhile and I got excited about more of the SA picks as a few really popped, but we all know what happened next. I paused for awhile and then re-upped, but finally cancelled for good in Spring 2023. My portfolio has just suffered way too much.
This isn’t meant to be a “TMF sucks” post, but I’m stuck wondering when to sell all of these duds since I no longer have access to the ‘advisor’ who suggested these were good picks in the first place. I won’t name individual stocks since these are meant for SA subscribers only, but a quick back-of-envelope count tells me that I have:
• 6 stocks up moderately (10 to 30%)
• 3 stocks up big (30 to 270%)
• 6 stocks down moderately (10 to 30%)
• 19 stocks down a lot (30 to 88%)
• 2 stocks barely up or down
Sadly I didn’t invest too much in the big winners, but it’s nice to have that one near-4-bagger to offset a few losers.
I know I can’t really expect a message board to give advice here, but I guess I’m wondering what’s a worthwhile approach when you have a lot of stocks down 70, 80 almost 90%. What have other ex-SA subscribers been doing? I think back to the dot-com era and I’m glad I didn’t hold onto some of those now-extinct companies, but I also have at least started to see some of these picks gain a little bit in the past 2-3 months. That said, it’s also a sad reminder of how many times a 90% loser has to double to get back to “even”.
Fundamentals matter, and they will be the reason a company prospers or not. With a fresh eye, simply do proper due dilgence on ALL of your positions and get rid of anything that is questionable.
The only reason to hold a loser is that you think it will recover. Most would be selling and taking tax losses.
Do you know how to make better choices now? You could probably do better with an S&P 500 Index fund. That would be a good place to park your funds while you work out a better strategy.
The Achilles heel of SA (and all the services) has historically been the lack of a sell discipline.
When the market votes a stock price down - either through distribution/selling or outright shorting, it’s a reflection of knowledge in or judgement by the pros that none of us have. When the game is over in a stock, it’s over. I’ve taken the late Bill O’Neil’s advice (IBD founder) and put a mental stop at an 8% loss. That’s where I start re-evaluating again. If it keeps going to 10 or 12 or 15% max then I get out. His reasoning was you only have to make 10% on another pick to make up for an 8% loss. SA rarely issued a sell afaik.
The lack of a sell discipline also hurts in bear markets like the one that obviously (at the time) started in early '22. However, the problem with timing is, as has been said many times, you need to be right twice if you don’t hold throughout it. That said, protection of capital you can’t afford to lose / need to live on (ie, out of stocks) is always paramount.
A useful approach is to pick a set # of holdings of SA (or any similar frequency picking service, and drop the oldest one or the worst performing one when you’ve hit your comfortable# of holdings.
There are some common sell signals. When share price falls below the 50 day moving average is a common one. Personally I would consider selling when the stock is down two days in a row.
These are blinking yellow lights. Should get your attention. Is it time to sell. Or do you have a good reason to keep it.
If its a really good stock these could be opportunities to buy more at good prices. But most would wait until it crosses the 50 day moving average on the upside.
So as not to lose any money, it is suggested to Tetter Totter a pair such as SPY and the inverse is SPDN.
SPY this year has 9 successful high trades with Zero losses. At each sell, we would switch to the Inverse and ride it out to the next sell signal. SPXL / SPXS and on and on.
