Dry powder...when is the time?

[dmpi]

I went in six figures on 2/29. Let's just say it's been one hell of a ride!
I'm not too supprised because I haven't been able to pick a bottom yet, but I keep trying...

[clifp]

I think yesterday would have been a good time to use some powder. Hindsight is way better than 20/20

[Nords]

Quote:

Originally Posted by Dawg52 DVY sucked today as it owns a good chunk of financials. I own a few other stocks to counter this and some have held up and some have not. Not a good day is relation to how the DOW held up.

Quote:

Originally Posted by clifp I think yesterday would have been a good time to use some powder. Hindsight is way better than 20/20

What a difference a day makes. I paid $58.75/share on the 3rd and I'm actually up on DVY.

I was hoping that it'd suck for another year or two of reinvested dividends... of course the dividends that were reinvested last July at $73.26/share are still down nearly 20%. Remember how much the S&P500 dropped in 2002?

Remember how 2006-7 was the "death of volatility"? The VIX actually dipped below 10 last Dec and again in Jan. Yesterday it was a tad over 32.

Yet in July 2002 it actually broke 50, and in Oct 2002 it came pretty close to that a couple more times.

In terms of rising volatility and being off the peak, we ain't seen nuthin' yet. When the barbers and shoeshine stock-pickers go short and advise buying futures on the volatility index-- then we'll be at the bottom.

[RockOn]

Quote:

Originally Posted by Nords In terms of rising volatility and being off the peak, we ain't seen nuthin' yet. When the barbers and shoeshine stock-pickers go short and advise buying futures on the volatility index-- then we'll be at the bottom.

I don't think we'll see that this time. I could be wrong. A run on the banks should be enough to get a bottom.

[growing_older]

Okay, I have no real interest in trying market timing, but with a small pile of mad money I tried to catch the falling knife and buy into some financial stocks. Overall I'm looking for 7-8% annual return in equities going forward, but I find that my "mad" experiment has gained about 16% in a single day. Now what do I do? Dump it and take my gain off the table? Ride it out and let this drift downward after my lucky timing? Pretend the paper gain doesn't exist? Let's see 16% daily would be what on an annual basis? Time to write and sell a newsletter.

Seriously, for those who do play with a little mad money: if you buy something just because you feel like it and happen to hit a lucky turn like this, do you take the gain or wait and see? I wouldn't have bought at this level.

[RockOn]

Quote:

Originally Posted by growing_older Okay, I have no real interest in trying market timing, but with a small pile of mad money I tried to catch the falling knife and buy into some financial stocks. Overall I'm looking for 7-8% annual return in equities going forward, but I find that my "mad" experiment has gained about 16% in a single day. Now what do I do? Dump it and take my gain off the table? Ride it out and let this drift downward after my lucky timing? Pretend the paper gain doesn't exist? Let's see 16% daily would be what on an annual basis? Time to write and sell a newsletter. Seriously, for those who do play with a little mad money: if you buy something just because you feel like it and happen to hit a lucky turn like this, do you take the gain or wait and see? I wouldn't have bought at this level.

Beginners luck. Hooked for life.

First part is when to buy, second part when to sell. Good luck

[unclemick]

Quote:

Originally Posted by RockOn Beginners luck. Hooked for life. First part is when to buy, second part when to sell. Good luck

I basically do the first part get some mad money and buy - I never bother selling, why would I? They either do good, do bad, merge, go private, go bankrupt or are otherwise generally entertaining.

That's why they call it mad money. Right?

heh heh heh - Now if you get bored with a company - sell and buy a fun one. I did spend the dividends once in a while.

[Patrick]

Quote:

Originally Posted by growing_older Okay, I have no real interest in trying market timing, but with a small pile of mad money I tried to catch the falling knife and buy into some financial stocks. Overall I'm looking for 7-8% annual return in equities going forward, but I find that my "mad" experiment has gained about 16% in a single day. Now what do I do? Dump it and take my gain off the table? Ride it out and let this drift downward after my lucky timing? Pretend the paper gain doesn't exist? Let's see 16% daily would be what on an annual basis? Time to write and sell a newsletter. Seriously, for those who do play with a little mad money: if you buy something just because you feel like it and happen to hit a lucky turn like this, do you take the gain or wait and see? I wouldn't have bought at this level.

As per the old addage: "Cut your losses and let your profits run."

Put in a trailing stop behind the current price. Set it far enough behind to give the price some room to move so you don't get stopped out right away. If your trading software doesn't automatically move the stop for you, check the price periodically and move it up when the stock price moves up; if the stock price moves down, leave the stop where it is. The market will get you out automatically.

[megacorp-firee]

Quote:

Originally Posted by dmpi I'm not too supprised because I haven't been able to pick a bottom yet, but I keep trying...

I hit it once ... law of averages ... you'll hit one in your lifetime too... but it'll cost ya. I've learned my lesson a while ago, ... tsk tsk DMTers

oh ... even got a few tops along the way ... also chalking it up to luck ... if you do it enough times everyone will hit it.

[growing_older]

Quote:

If your trading software doesn't automatically move the stop for you, check the price periodically and move it up when the stock price moves up;

No software involved, and I'm not sure I really understand what you are telling me. In hindsight, the too good to be true pop up in price has settled back down, so maybe if this ever happens again, I lock in that outsize unexpected one day gain, then go back and refigure the original proposition in light of the new prices. Live and learn.

[dmpi]

Quote:

Originally Posted by megacorp-firee I hit it once ... law of averages ... you'll hit one in your lifetime too... but it'll cost ya. I've learned my lesson a while ago, ... tsk tsk DMTers oh ... even got a few tops along the way ... also chalking it up to luck ... if you do it enough times everyone will hit it.

I normally buy in big about once a year. I've done this about five or six times now with mixed results. All in all, I think I've done very slightly better than if I just dollar cost averaged it in. But still... the thrill of picking the bottom. I swear i can do it... even though history has proven me wrong many times.

[megacorp-firee]

Quote:

Originally Posted by dmpi I normally buy in big about once a year. I've done this about five or six times now with mixed results. All in all, I think I've done very slightly better than if I just dollar cost averaged it in. But still... the thrill of picking the bottom. I swear i can do it... even though history has proven me wrong many times.

As they say ... even a broken watch tells the right time twice a day.

[SecondCor521]

(Emphasis added)

Quote:

Originally Posted by dmpi I normally buy in big about once a year. I've done this about five or six times now with mixed results. All in all, I think I've done very slightly better than if I just dollar cost averaged it in. But still... the thrill of picking the bottom. I swear i can do it... even though history has proven me wrong many times.

Confirmation bias?

2Cor521