Coby, There is an old saying that you trade winners and buy and hold losers. <G>
The point with my style is that, as discussed in the note to you just above this one, I have a fundamental outlook for the cos. I like and hate. As long as those fundamentals do not change, price movement against me does not matter. Sometimes the fundamentals do indeed change, but the stock price reflects the new circumstances or even discounts it. INHO, this is true of my holding of Midway. I bought expecting a big Xmas. That is now not going to happen. But the stock price has gone down so much that it discounts the big first and second quarters of 1999. So, though it I am holding it at a loss, it passes the test of whether I would buy it today with what I know now.
I do realize losses and cuss a lot when a co. not only refuses to perform like I expect, but looks like it is overpriced on the new fundamentals. An example would be Snapple a few years back. I sold it short very nearly at the top. When it fell to the high teens, I covered my short. When it fell to the pre-teens, I bought shares. It fell further and fundamentals deteriorated. I decided to sell. On that occasion, I was bailed out by a bunch of punch drunk Quaker Oats executives, but I had decided to sell it before Quaker suckered in.
I key on the fundamentals. IMHO, nothing has changed with the scientific progress and long term potential at the biotechs I like. I knew going in that they were speculations. Am I happy that Genzl is at $3 1/2? Heck no. Am I selling because the price has changed? Except for tax purposes, and I will hedge that with options, the answer is no.
MB |
