GaBard,
DD on pennies. That's a topic by itself. This is all a work in progress. As you know, the integrity of a co.'s management is all the co.'s at this level have. And when that is frequently in question, one gets a bit sarcastic. The question is" Which is the ideal way to make money in BB's?? Hold or Trade? Probably both. The market will ultimately teach us which works better. Too bad there is so little written on BB investing.
The argument for holding are several. For those who admit they are no good at trading, it's probably best to find a few strong looking ones, and keep them. A beginner trading BB's WILL LOOSE MOST OF HIS/HER MONEY. Reliable DD results in a low stress wait.
However, what is the opportunity cost of waiting?? I've seen several cases where a group of investors banter on a thread day-in day-out of the merits of BB co. The CEO is loved and trusted by all. While they spend years there, I have successfully traded the stock, and put my money elsewhere while the TA was poor. All this time they were there and hoping. DELL gained how much in the past 18mos?? In fact they remain there after the collapse.
The problem is as soon as you become part of a crowd, you will ignore what the chart is screaming at you! When I am in a BB stock, I will peak at the thread to glean useful info on the reason for the run-up, and no more.
The question of opportunity cost (the grass is ALWAYS greener elsewhere) depends on one's investment time-frame and other personal issues. For me, 3-6 months is the limit for holding non-performing BB's. I can always keep tabs on the stock if it turns out I sold early. Different strokes for different folks I guess.
Having said all that, you are probably the best at BB DD, so if any are worth holding rather than trading, yours definitely are.
Rashid |
