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Hello Crazy Moochers,
My 2007 New Year's resolution was one I managed to keep - well eight times out of 10, anyway. I'm really pleased at that, because I make the same pledge every January 1st - and have never been able to keep it at all before.
The promise I always make to myself is never to hang onto a loser. I give each share only a meagre 7 percent leeway. Most people will tell you that a 7% stop loss is too tight. They say that a 10 or even 15 percent loss is the place to come out.
Well, maybe my 7% losers do come back later. But even though I sell at a 7% loss, I keep my eye on the share. After all, I thought it was a winner once, so presumably many of the same benefits still apply. Even though others did not think so - and the share wobbled.
Having sold a loser in this unforgiving fashion, I am very ready to buy it back if it starts rising again. Even if it fell an awful long way, after I sold it. This is not a dead cat bounce, which are unreliable, but a recovery which is far more attractive to this old punter.
I love recoveries. The share might once have been worth £10, but it falls to 10p. So surely it's not too much to expect that it could rise to 20p. This is a long, long way from the record high. But it still represents a 100% gain. Which is always welcome. Even though a 10 bagger is much more preferable.
Personally, I do not count a 20% profit as a victory. I only get excited by a share which doubles. And they do happen quite a lot, actually. If you do your research and don't take wild guesses. You need all the research help you can get. But you already know that, don't you?
Happy New Year, gang - and don't forget that the wine will be flowing in the Punter's Return on Monday night. God bless!
To find out more about Malcolm CLICK HERE
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