Friendly message to everyone on the thread, especially the "burnt" investors.
I'm investing more than 20 years and learned the hard way just like you're doing. Also made $100K in a week on four net stocks by remembering the trading rules that were learned with sweat and blood.
As someone said to me this morning, "all the lemmings are getting killed." My response "that's why you've got to be a salmon when you trade." That is to say, you've got to learn to swim against the tide. Watch the Yahoo thread (they're more emotional than folks on SI and perfect for this exercise). When you see several thousand posts over a long weekend about a stock, you know a certain "giddiness" factor has been reached. It was there all weekend on the NAVR thread.
Especially beware long lists of posts that have only a headline with $ signs and capital letters proclaiming that the stock is going to $100. That's not enthusiasm. That's pro traders looking for someone to sell their stock to the following morning.
Then follow these rules:
1) NEVER NEVER place an early morning market order under such conditions. The MMs will kill you (imagine the poor guy who paid $27 for NAVR this morning?) Instead wait till after 10 a.m. to see which direction the stock is taking and make your trade decision then.
2) If you can't help buying at the opening, only buy half what you'd planned and average the rest.
3) better yet, figure out that the giddiness factor is taking over a day earlier and then sell into the opening swell (the salmon approach). Swim against the tide, in other words. I placed an open market sell this morning just before 9:30 and got over $26 for my shares.
4) listen to CNBC or something like it before the trade day starts. That's how I knew the S&P futures were in negative territory before the trade day even began. Stocks don't trade in isolation; they trade against the backdrop of the whole market. You're at a trading disadvantage if you don't pay attention to the broad market (not the DOW, that's just 30 stocks.)
5) If you think you made a mistake, bite the bullet. One day's action does not make a mistake though if you did some good DD. NAVR still has an IPO to announce, as they promised, or there'll be class action suits. Assume one will happen, soon, or by January. There's a case to be made for holding NAVR because it's selling for only 1 times revenues, making it a relatively "cheap" internet stock.
Good luck guys and don't be so hard on yourselves. Even pros make mistakes once in a while. Just paste this rule over your phone or computer: "You can only sell shares at a good price when someone wants them." So when you begin a trade, also think about a specific exit strategy instead of just thinking you want "more." Otherwise you never know when to capture profits.
-Ariella |
