JC Penneys Q2 profit down 36 percent

Up 7%

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soulful/latin/deep house + jazz

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Originally posted by mndeg JC Penneys Q2 profit down 36 percent Up 7%

Everybody seems to think oil coming down is a huge bullish signal. Retail and consumer discretionary giving potentially a huge head fake, IMO. Especially considering the stimulus package has run its course.

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Originally posted by Shakka Don't you at least use a stop-loss point?

No stop loss. If NVDA declines past my buy point, I'm averaging down. I sell only if the fundamentals or valuation change for the worse.

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Originally posted by Krypton No stop loss. If NVDA declines past my buy point, I'm averaging down. I sell only if the fundamentals or valuation change for the worse.

Your strategy is your strategy, but that sounds particularly foolish. Don't kid yourself into believing you're smarter than the market. A good better knows when to hold 'em and knows when to fold 'em.

The only problem with "averaging down" is that it is the same thing as adding to a losing position. It is always a tough decision, but most if not all professional investors will at least establish a stop loss trigger as a disciplinary device to keep them from losing their shirts. Nobody makes an investment expecting to lose money. Just my 2c.

My goal is to never have draw downs

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soulful/latin/deep house + jazz

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Originally posted by Shakka Your strategy is your strategy, but that sounds particularly foolish. Don't kid yourself into believing you're smarter than the market. A good better knows when to hold 'em and knows when to fold 'em. The only problem with "averaging down" is that it is the same thing as adding to a losing position. It is always a tough decision, but most if not all professional investors will at least establish a stop loss trigger as a disciplinary device to keep them from losing their shirts. Nobody makes an investment expecting to lose money. Just my 2c.

If I used a stop loss with my investment in EGY @ $4.76, I would have never doubled my money. The stock dropped from $4.76 to $3.70, about a 30% loss. But I bought more. I consider the market to have ADD/ADHD. It is a voting machine short term, while long term, it is a weighing machine. My strategy is based on the market NOT knowing more than me on specific companies. If I find a highly under priced company, obviously the market does not know more than me, otherwise, the company would be efficiently priced. I don't believe the market is efficient at all.

Traders would find stop losses much more useful because they rely on the movements of the market, not the underlying fundamentals of the assets they buy.

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a stop loss doesn't mean you can't buy a stock back if you step back and re-evaluate. It simply means you staunch the bleeding because the market isn't going your way at the moment. But again, your strategy is your strategy and you are a long-term buy-and-hold guy. I have plenty of issues with that approach, but there are plenty of gripes with my approach as well. Simply constructive criticism.

What is your cost basis on EGY? When and at what prices did you buy how much? Interestingly, from a long-term buy-and-hold standpoint, if you bought it back in 2004 at ~$4 and sat on it, your total return to date would be ~65%. Definitely not bad at all at 16%/year (very basic math). However, if you were more active in the position, using certain levels as triggers to take profits or add to your core position, you might've sold half or more of your initial shares around $8 in '06 (still had long-term gains), avoided the painful downturn in '06, bought back when the stock stabilized in '07 around $4.50 and would have a much bigger pile of money to your name. (And yes, I readily acknowledge that it's easier to see this with hindsight and that it's very hard to make these decisions real-time)

I want to make as much money as possible without taking too much risk and not being too greedy. I've seen too many stocks go up and down to know that it's possible to leave a lot of extra money sitting on the table if I don't take a more active role in managing my portfolio.

Last edited by Shakka on Aug-15-2008 at 20:40

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Originally posted by Shakka a stop loss doesn't mean you can't buy a stock back if you step back and re-evaluate. It simply means you staunch the bleeding because the market isn't going your way at the moment. But again, your strategy is your strategy and you are a long-term buy-and-hold guy. I have plenty of issues with that approach, but there are plenty of gripes with my approach as well. Simply constructive criticism.

heh, well, it is an art, not a science..

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Originally posted by Krypton Traders would find stop losses much more useful because they rely on the movements of the market, not the underlying fundamentals of the assets they buy.

Also, fundamentals change, not just prices. What was a great bargain yesterday does not necessarily make a great bargain today (Just look at financials). That's why I like to be more proactive.

As you say Shakka it's all about simply selling higher than you bought.

That is if you think it'll dip short term sell then buy back. If it'll go up hold. If it'll dip sell. By cascading triggers and simply waiting for them to do their work you can make a lot of money fairly quickly.

So many times I hear people say "yeah it's going to go lower but I'm going to hold until it come back up". Now if you're in profit are you likely to say that?

No. Why?

Because you don't need this stock to go higher. You don't have to rely on hope which at the back of the guy who is at a loss is constantly saying "hold hold any second it's going to sky rocket and you'll miss out after all this pain..." even though he knows it is going to dip.

I know because I do it. It's not logical, it losses money but it's human nature.

That said it all depends on your view if you are really playing it long term then you should mainly watch are the fundamentals not the share price. Because these are the long term indicators.

Obviously watch the prices but if you are playing long term a few points movement in a day shouldn't matter it's the months movement consistent trends.

And at my level I can't be chucking enough cash at purchases to negate the fees and taxes to day trade, so why be overly concerned about a days trade (unless we are talking a real crash or spike)?

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Originally posted by Dervish As you say Shakka it's all about simply selling higher than you bought. That is if you think it'll dip short term sell then buy back. If it'll go up hold. If it'll dip sell. By cascading triggers and simply waiting for them to do their work you can make a lot of money fairly quickly.

I don't dispute any of this. It's the discipline part that kicks in when things happen that you don't expect or account for.

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And at my level I can't be chucking enough cash at purchases to negate the fees and taxes to day trade, so why be overly concerned about a days trade (unless we are talking a real crash or spike)?

I hear you here. I'm not saying daytrade--fuck, that's insane and not worth the stress. But I am saying you need to actively manage your money and not just think you can put something to bed, wake up 5 years later and expect that it will have blossomed into a vibrant garden. You have to pick the weeds from time to time and throw out your losers so your winners can flourish. That's all. And this can be especially true with technology stocks. The tricky thing with tech stocks is that many of them are fast growth stocks, but technologies are always being replaced and a lot of times a high-flying tech company today is an irrelevant collateral victim tomorrow. Does anyone remember U.S. Robotics? Man, modems were so hot!