Ensco International Inc. (ESV) Message Board

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Gold/Mining/Energy : Ensco International Inc. (ESV)

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To: Gottfried who wrote (1470)	9/18/1998 12:12:00 AM
From: Charles Holewinski	Read Replies (3) of 2005

Hi There Mr. Gottfried: About a better exit strategy. Why not employ what I call a 10% rolling stop loss strategy. You merely tell the broker to sell the stock whenever it falls 10% below where it has been since you put the rolling stop loss order in. As long as the stock does not drop 10% say below your entry point the stop loss would not be exercised. As the stock goes up, the price at which the 10% stop loss would be exercised keeps going up. I think a good time to employ this strategy is when you have a sizable profit in a stock, such as 50% or more and you want to protect it. The technique might not work well with stocks below 10, especially below say 5 since a 10% move could happen w/o a significant reason. But when a 30 dollar stock drops 10% it is usually for a significant reason. I am long six or seven drillers in which I got in near the top and did not pay enough attention to what was happening. Before I knew it they were down about 25%, a point at which I felt I could not sell. Now they are 50 to 75% below my entry levels and now seem to be at their rock bottom lows. I am very sorry that I did not employ the rolling stop technique to these issues. This technique I think is especially useful with cyclical sectors of the market where one knows turnarounds will occur. The drillers obviously will not move up in any meaningful manner until the price of crude starts to move up. When that will happen is anybody's guess. But I feel this will not happen anytime soon since economies throughout the world are currently cooling off and none of the governments are willing to lower interest rates for fear that their currency will be devalued. If this keeps up the demand for crude will remain low and so will its price. In the meantime enjoy the low prices at the gas pump. Charlie

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