SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Value Investing
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Madharry who wrote (39514)10/1/2010 7:08:06 PM
From: E_K_S  Read Replies (3) of 78627
 
Hi Madharry -

I have too much experience from the wrong side not to go in with a set plan for peeling off profits. As you recall, I rode DRYs up from $9.00/share to $130.00/share, only to peel off my seed money at $75.00/share and ride the rest of the deal back underwater to $4.50/share.

I now set an exit plan for every investment I own and use a modified minimum income return (yield) where I collect dividends, write covered calls, peel off profitable shares or just exit the investment.

If in my view I feel that the investment is significantly under valued (and the rest of the market just does not get it), I limit my total portfolio exposure to 1% or less.

In my DRYs example, everything was on track. I only had 1% of the portfolio invested in the company. It grew to over 12% of the portfolio value. I took my 1% off the table but should have been more diligent with the 11% I let ride.

I felt good booking my seed money but felt like a jerk letting those profits disappear.

Money management is so key in any investment strategy. It seems like every 10 years I have an expensive learning event. My previous learning experience was shorting a stock w/ no exit strategy. That cost me as much as a four year college education.

Just be sure to take your seed money of the table first and then establish a strategy to peel off shares that produces an overall rate of return that meets your minimum acceptable (annual) amount. Then I guess you let the rest ride.

FWIW my biggest winners in the portfolio are natural resource and integrated oil companies I have owned for years (over 20 years). DRYs never had assets in the ground and was hugely leveraged w/ lots of debt. Now I know.

EKS
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News