Hi Arturo - you can get out but it will take time and effort.
It is real tough being 'underwater' in any investment, especially if you don't know how to recover! I was in your predicament when silver collapsed in the early eighties, but if I knew then what I know now it would was actually a great opportunity to make money - not just to sit there and lose my mind as well as $$$. It is a nightmare, for sure.
You will probably get a lot of responses that say to hang in there - it will recover, and you will make money. They may be right, but when will it happen and will you go crazy first? I agree with another chap that answered your post, Hugh I think is his name - sell and buy it. For example it moved up nicely today, over 5 points. Did you feel better? No way - since you need it to go up 60 points. The only sure thing in this stock is that it will move! When a stock moves you can make money - but you can't be married to it. You may not trust yourself to buy and sell at the right time, so don't try to be too cute with it and catch every 3 or 4 dollar move. That's tough and even the pros miss out - but they learn to sell their losers real quickly and then generally take the other side.
You will probably see a good rally in it now. It may very well go to 90 at some time in the next two weeks. Don't sell on round numbers, like 90, sell half at 88 and the other half when you see it leveling off, but be sure to sell it! - don't you wish you sold it when it recovered to 100 after the big collapse? After you sell don't get disgusted and walk away - it is only the second inning. Also I don't think you should sell it short at the top because you don't know where the top is - no one does, they don't ring a bell. The safest way is to just wait for the swing down - which will probably come swiftly and violently. As you know from before. That will be from large scale short selling which is terrifying to see - like a locomotive. At the top use a stop order to make sure you sell your last shares (don't use a stop limit order because it may never get filled) - your broker can tell you more about these types of orders.
After the big short selling is over, it may be around 30-40. Now be careful. Buy some shares when it levels off after a day or two at the bottom. They will rise in value again - but don't use all your money on one day, space it out over a few days - this is hard to do but necessary because they don't ring a bell at the bottom either. This way, even though you will have less money invested than you do now, due to your loss, you will own probably double the shares at maybe 100 dollars less per share than you do now.
The thing about the people that sold short on the big swing down is that they need to buy back the shares. So it will swing up again, as they buy and you can sell it like before and make your money back. It will take some time, and some work but you can do it. The one thing you should do is buy enough puts when you reinvest (buy it back at the low) so that you will be guaranteed to get a preset price if it doesn't come back up - that is what the best strategy would have been in the first place, i.e. buy stock at 130 and at the same time buy puts to have the ability to sell the shares at say 110, to limit your potential loss (just like an insurance policy!) - you could have even sold 'covered calls' at a strike price of say 170 to pay for the price of the puts. But don't worry about that now, although it is a good strategy in a volatile stock like PRST - and maybe you will want to do it in the future.
I know this is a long message but I can sure feel your pain, and I wish you well. In my own case, I am way ahead on this stock and hoping it goes up right now - and that it goes down later. I will work these swings as long as the stock is around - which if the bulls on this thread are correct will be a very long time. (I hope they are right!) The only guarantee anyone can give you at anytime is that PRST is going to move around a lot. So you have to work with that - in fact you can end up making out okay on it, although your nerves will be shot... The next two weeks should be very volatile due to option expiration the end of next week as well as the earning announcement later in the month and wildcards like the SEC and Lutts, etc. This can all add up to cause wild swings - so use day orders and get them into the computer early in the day so they will be executed when the stock gets to your price - that way you can try to live a normal life and not be watching it all day with your finger on the trigger. Please let me know how you make out. Kind regards, RH |
