It's Not 2010 But Sometimes I Invest Like It Is
I made the decision to self-direct my investing and I have lived with that decision through the good times and the bad. It's not for everyone but when it's good it certainly makes up for all the sad stories along the road.
I have often sifted through chat rooms looking for commentary on certain stocks but in the end it's all just banter to me. I know some people feel bashing on bullboards has become an issue but someone needs to play devils advocate for investors. It's not all blue sky and winning stories. You have to look at investments from every angle even if its done in a manner you don't like.
Share price is driven by a lot of factors. I feel certain sectors run on little if no news due to a strong demand. Market optics and promotion need to be in place when it happens. You can be pouring out good news to the market but if no one has heard your story then who's really watching? As well share price moves a lot better for juniors that have not bloated up yet in their outstanding share count. A smaller 40-60 million share float offers liquidity while still maintaining a tight float that more advanced investors like to see. Lets face it if the float is big we need to eat through a lot of shares just to move up a penny or two on news and likely will retreat very fast after 48 hours.
If I miss a story as it launched I will watch the share price and evaluate the news. I don't like chasing the ask and will often sit on a bid well below the trading price. Some stories based on hype will only have a 72 hour shelf life so if I really want shares I don't have to wait very long. Lately good news is an opportunity for liquidation for some investors so the goal is to retain some of the traction while waiting for the next news event. By the same token I tend to sit and watch a story bleed out and don't reward sellers by placing bids. I wait until I feel the story has bottomed out then I move in my support. Unless of course I feel its now dead then I just move on and forget it. You have to take the emotion out of investing to truly succeed.
I constantly watch the buying and selling pressure on stocks that are running. I have been in several plays where I was up 500%-700% and started to see the sellers line up. I wasn't going to sit around and watch my profit shrink so I started selling. It's not that I lost faith I just like to lock in profit and move on and do not let greed cloud my judgement. I sell in thirds and then exit. I usually don't keep anything after I move on. I can't be bothered to track stories I have small positions in so I am usually in big or not at all. But I never go all in on any story. The most I usually have in any stock is 20% of my portfolio and that's probably too much if you ask some other traders. Bad things can happen to good companies and I may have to move out and salvage my investment and live to fight another day.
Ironically I have had emails from investors asking if I sold a stock that was up 1000% or even 3000% and that I should have called them and told them to sell as well. My response has been and always will be; if you need someone to tell you to sell when your up a couple thousand percent maybe your not suited for self-directed investing. 10-baggers are sweet but don't expect one every week.