If I choose to keep money in a loser that never moves and have 'dead' money, I need to reexamine my approach to investing.
I agree with this sentiment (and strategy). Unfortunately, the day after I sell these "losers" they always seem to become winners. I think I'll start by selling half of some losers, even thought the IRS has given me seemingly unlimited future tax credits for losses last year.
All of a sudden today I am completely out of 5 of my holdings that have appreciated during the week (NETA, SUNW, EFII, AFFX, PDS) but, of course, kept my "losers" such as JBIL (bought last Friday at 44 1/2 and 44 3/4 and Monday at 40 1/2, although the "Monday" stock went Tuesday at 42). At this point I am betting that cash may be a useful investment in the next couple of weeks of warnings season and that I will be able to get back into some of these stocks lower.
JBIL is a tough call. Earnings could drive it way up or way down. If this looks questionable yet before the announcement then I may apply the "sell half -- keep half" philosophy here too.
AT will remember the lesson of the high volume of PUTS immediately before the demise of Applied Magnetics (APM) last fall. PUTS are ominous to me, even if someone is just trying to make a few (thousand) bucks. |
