This iShare was pretty thin prior to the recent activity. I don't know what next week holds- but looking at the 5 day chart of the indexes showed me a bear rally that looked to be getting a bit long in tooth unless this is the start of something bigger. ie the Dow, is up 800 points or 10% off the intraday low. Took some profits, but most positions left on the table for Monday.
You'd asked awhile back, why would someone buy expecting as much as a 25% hit. At least I think it was you. Well, the old clatter trap I use for a brain/mind has pondered that issue some, from my own less sophisticated perspective.
Seems I know I can't pick the bottom, so I've adopted a mechanical approach at buying at a level where I think there might be value, with reserves held if things get worse. Usually they do. As long as the fundamental picture doesn't change, I don't hestitate to violate the "don't average down" rule.
I also scale out, and lately have been more aggressive on taking profits when presented. Since I'm limiting myself to playing long, that means I've got to be in the market before the gap up, if I'm to have anything to sell, since I'm reluctant to let myself chase stocks on what might be a head fake. Like today, as much as I wanted to, I wasn't willing to throw money at OSX/XEL stocks. I'll wait to see if this thing has legs, or buy on future weakness.
It was quite clear during the March 22/April 4 bottom and subsequent rally, that if you weren't in stocks the first few days, you left the bulk of the move on the table. Taking a bite out of the middle might make sense in a trending market where the trend is in your favor, but when you're playing counter trend, must be nimble.
Myself, had I not been fully invested by April 4, I would have wondered if the rally were for real april 5th, regretted not having bought earlier april 6th, and maybe 'capitulated' and bought in april 7th. So for me at least, it makes sense to suffer some losses being a bit early, and trying to keep some dry powder no matter how cheap things appear to be. Lowers my performance over the long term, but I already know I'm not capable of flawless execution. |
