This is why

[RobbieB]

There ya go. Like a company, or a market, or a concept, new tech? Give it a shot!

 

[yakers]

The question I have for the active traders is about knowing when to sell. Many years ago I committed as much as I could at the time (only $20K but at the time it was a lot of my disposable resources) and I put together a portfolio and beat the S&P500 over some years .(Started with direct DRIP funds, remember those, I'm an old ....) I realy do think that I can successfully figure out a good time to buy a stock. But I find I have not figured out selling. My INTENT is to hold a stock 'forever' or only sell when a life event requires although monitoring the portfolio will produce occasional sells if I find what looks like a less productive stock and I think I have found a better one. But I could never be a frequent trader. For me most things seem overpriced today including my holdings, I would not buy them at the current price but am not ready to sell them just yet as there is no delta to the general market.
A recent buy of mine, and my only meme stock PLTR I bought because it actually has a decent product. I planed to hold it near a year and if down sell for the loss or if up keep it past a year and probably sell at lower cap gains. But now I have set it to sell for a 10% gain as its just too much volitility for me.
So how do you traders figure out when to sell?
It just seems really important, I once had a performance car and the first thing I did is upgrade the brakes-nothing lets you go faster than being able to stop. So I see selling that way and I'm not good at it.
I also wonder how the traders manage their fixed income. Seems even harder than managing equities.

 

[captain3d]

I have one such success story in my portfolio - NFLX. I bought some shares in 2010 at $17.90 when they were basically a DVD renting company. Today's price is $515.92, i.e. up 2,882%. I have never sold a share.

I can't claim that this successful gamble was based on technical analysis. I basically thought that the streaming idea was interesting, had some idle cash (not a huge amount by any means) and jumped in. Fast forward to today, and NFLX is about 10% of my portfolio.

But what % of your net worth did you put on it?

That is the tricky part.

 

[tutan]

I have one such success story in my portfolio - NFLX. I bought some shares in 2010 at $17.90 when they were basically a DVD renting company. Today's price is $515.92, i.e. up 2,882%. I have never sold a share.

I can't claim that this successful gamble was based on technical analysis.I basically thought that the streaming idea was interesting had some idle cash (not a huge amount by any means) and jumped in. Fast forward to today, and NFLX is about 10% of my portfolio.

I've been using their DVD rental since early 200? but never bought a share of NFLX. The stock price didn't go anywhere in those years. When they got into the streaming business, I figured the competition would be too fierce for that small company to survive in, so became even less interested in the stock.

 

[thefist]

The question I have for the active traders is about knowing when to sell. Many years ago I committed as much as I could at the time (only $20K but at the time it was a lot of my disposable resources) and I put together a portfolio and beat the S&P500 over some years .(Started with direct DRIP funds, remember those, I'm an old ....) I realy do think that I can successfully figure out a good time to buy a stock. But I find I have not figured out selling. My INTENT is to hold a stock 'forever' or only sell when a life event requires although monitoring the portfolio will produce occasional sells if I find what looks like a less productive stock and I think I have found a better one. But I could never be a frequent trader. For me most things seem overpriced today including my holdings, I would not buy them at the current price but am not ready to sell them just yet as there is no delta to the general market.
A recent buy of mine, and my only meme stock PLTR I bought because it actually has a decent product. I planed to hold it near a year and if down sell for the loss or if up keep it past a year and probably sell at lower cap gains. But now I have set it to sell for a 10% gain as its just too much volitility for me.
So how do you traders figure out when to sell?
It just seems really important, I once had a performance car and the first thing I did is upgrade the brakes-nothing lets you go faster than being able to stop. So I see selling that way and I'm not good at it.
I also wonder how the traders manage their fixed income. Seems even harder than managing equities.

I'm not an active trader, but have read up on the subject. A trader should know when to get out before they buy. You can use technical analysis, end or qtr result, M&A, major announcement, whatever, but once you have hit or missed the target, the trade is over.

And another piece of advice... don't make trades into longs, and vice versa.

 

[thefist]

My single greatest failing as an investor has been holding too long. I have researched carefully, found some great stocks and seen them go up 2x, 3x, 4x or more in relatively short order, only to have them subsequently give up most of those gains before I got around to selling. What I should have done is stayed on top of the them better and asked myself anew every week or so "would you buy today" And if the answer was "no" I should have sold right then.

My biggest problem has been proper selling discipline, and usually too soon. All this is behavioral investing. Spend the time working on your behavior and results should follow.

 

[MRG]

The question I have for the active traders is about knowing when to sell. Many years ago I committed as much as I could at the time (only $20K but at the time it was a lot of my disposable resources) and I put together a portfolio and beat the S&P500 over some years .(Started with direct DRIP funds, remember those, I'm an old ....) I realy do think that I can successfully figure out a good time to buy a stock. But I find I have not figured out selling. My INTENT is to hold a stock 'forever' or only sell when a life event requires although monitoring the portfolio will produce occasional sells if I find what looks like a less productive stock and I think I have found a better one. But I could never be a frequent trader. For me most things seem overpriced today including my holdings, I would not buy them at the current price but am not ready to sell them just yet as there is no delta to the general market.
A recent buy of mine, and my only meme stock PLTR I bought because it actually has a decent product. I planed to hold it near a year and if down sell for the loss or if up keep it past a year and probably sell at lower cap gains. But now I have set it to sell for a 10% gain as its just too much volitility for me.
So how do you traders figure out when to sell?
It just seems really important, I once had a performance car and the first thing I did is upgrade the brakes-nothing lets you go faster than being able to stop. So I see selling that way and I'm not good at it.
I also wonder how the traders manage their fixed income. Seems even harder than managing equities.

PLTR and volatility make it a great options play. I've been playing it for months and I'm able to pull about 1% weekly on puts/calls.
I like their business but don't want be long the common right now.

 

[Animorph]

I've done individual stocks, active mutual funds, and broad index funds. My performance seemed to be about the same with all three, but I spent way more time managing individual stocks and active mutual funds.

Sure I had some spectacular individual stocks, Tesla is the latest, but I also had a few total losers and many average performers. I felt like all of them were potentially big winners when I bought them. I guess my stock picking skills were average. It's kind of hard for me to recommend an individual stock portfolio for a beginning investor, or one of unknown skills.

If I had to win a stock contest I'd pick one stock and let it ride. If you diversify to avoid some individual stock risk, your gains start tending toward the average. Of course there's always luck as well.

 

[moneymaker]

Agree!

100% agree. Even a 5% allocation of ones portfolio to early stage micro cap companies, crypto, whatever, can seriously increase ones portfolio and overall net worth. The risk to reward is a no brainer IMO. It only takes 1 or 2 Tesla’s or apples to be life changing.

 

[Sunset]

Long long ago far far away I remember The New Orleans Chapter of AAII had great pastry and coffee. I too never put 'enough' into any single recommendation.

....

I've wondered if AAII is actually worth it or not.

Did you find it worth it, besides the pastry and coffee meetings ?

 

[Koolau]

My only single-stock holding is my old Megacorp. I've held it through thick and thin for the better part of 50 years now. It's in my 401(k) and in my brokerage acct. (from company compensation via stock options.) Yes, I've sold some (often, actually) to lower my stake in it and to crudely rebalance. I must have some shares that (following multiple splits) cost me a couple of dollars. I have made a ton of money from it over the years.

I've held it because, there were times when I thought to myself: "This company is going nowhere. I need to get out of this stock." Every time I thought that, the stock came roaring back within a couple of years or less. I KNOW the company and I know how it's run. SO, even though it is high now and it may not stay there, I feel comfortable having as much as 5% of my NW in it. I'm sure that's (officially) too much, but I'm comfortable with it. YMMV

Currently - and typically, I do not own individual stocks BUT I recognize their potential and applaud winners AND risk takers. I live vicariously through them. Thanks Blue531. Keep us informed on your multi-bagger. Best of luck!

 

[unclemick]

I've wondered if AAII is actually worth it or not.

Did you find it worth it, besides the pastry and coffee meetings ?

Yes and no. Grin. Even though to this day I buy 'a few good stocks' with mad money AND watch way too much sports on TV/cable I call it 'entertainment. The reason being with the benefit of hindsight over the decades the heavy lifter was index funds in my 401k (for ER). I enjoyed the people, guest lectures and of course the coffee and pastries.

heh heh heh - From 1966 out of college and a newly acquired? sold? Dean Witter Broker to this day I 'putz' er experiment. So my non answer answer is I mentally put all the things tryed over time in the entertainment category as index funds worked for me. Had one stock worked, I might have a different viewpoint.

 

[ArmchairMillionaire23]

It just seems really important, I once had a performance car and the first thing I did is upgrade the brakes-nothing lets you go faster than being able to stop. So I see selling that way...

+1! Awesome analogy. I might use it someday.

 

[garyt]

You are all free to NOT take advantage of the potential of the market. I won't lose sleep over it.

I shared my thoughts on why I do it and I'm sure millions of other people are investing in individual stocks for the same reason. Potential.

Why so many of you get upset is ridiculous, laughable even. If you don't see the potential out there or want to take any risk, don't. No one is asking you to.

People can hardly come in here and talk about investing in individual stocks without being bashed over the head. People making absurd comments about stocks being like lottery tickets. Making comments about wanting guarantees. There are no guarantees. Everybody knows this.

The potential is there. And many people like taking some risk. What is the point of having an investment forum if people can't discuss individual stock investing in peace.

Quit bashing people for actively investing. This room is quite stifling because of this aspect.

If we had a "like" button, I'd be hitting it for this post.

 

[GaryInCO]

There are so many great businesses worth investing in individually, ones that can return 50% t0 100% per year or more--

The analogy that comes to mind is "there are so many lottery tickets that win big." Yes there are, but which ones? If you have a skill for picking hot stocks, good on ya. I've never had the touch. Decades ago I quit buying stocks because I was sick of losing money. Thank God for real estate or I'd never retire.

My brother on the other hand has been a frothing Apple fanboi since the early 80's. I have no idea how much money he's made on AAPL, but it's a lot. More recently he's also become a zealous acolyte of the Church of Tesla, and he's made a bundle on that too. So I know it definitely can be done. Just not by me, in my experience.

My active investing isn't "pick a good stock to hold longterm," but "create a process to select the asset (commodities, forex, ETFs) to hold right now." For over 20 years I've been interested in active trading with mechanical rules I developed. I've often been extremely successful with it. It's not easy, and it gets harder all the time as the market "learns" and evolves, but it is often very rewarding.

 

[yclipse]

There is no gain until you sell. Until then it's just a possibility.

Years ago, I invested $18,000 in Sun Microsystems and watched it rise meteorically to about $100,000. Then I watched it fall back to earth.

Over time I developed a couple of rules. (1) If it falls by 10%, sell. (2) If it rises by 30%, sell.

If you disregard those two, and sometimes you will, think of a third. If it rises by 100% or more, sell half and keep half. You've got your investment back, and now you're playing with the house's money.

I disregarded that one on Berkshire Hathaway. It has tripled in value since I started my incremental purchases 18 years ago, and I'm hanging on to all of it.

 

[ERD50]

....

Over time I developed a couple of rules. (1) If it falls by 10%, sell. (2) If it rises by 30%, sell. ... .

I'd love to see a simulation of that (or real data if you have it).

IME, selling at every 10% loss would mean locking in a lot of losses (many great performing stocks have had > 10% setbacks along the way). Most of the stocks traders are looking at are fairly volatile. And selling at 30% gain is capping your gains. Is that enough to offset the losses and still come out ahead enough to make it worthwhile?

.... If you disregard those two, and sometimes you will, ....

Well then, they're not really "rules" are they?

-ERD50

 

[Live Large]

Hindsightis20

Hmmm- since 1966 I've had a few 10 bangers(ala Peter Lynch), some gone to zero, and a lot of so so not worth bragging about.


while I was busy being 'a legend in my own mind' my ho hum 401k steady contributions to index- aka Bogle's Folly' ended up being 'the big dog on the porch' funding the bulk of my ER.

I knew people at work who single stock funded their retirement fund including one who collected guns and one with raw land. And a few over the decades in rental RE. J&J, IBM, and Home Depot pop into memory.

Heh heh heh - many roads to Dublin and all that but myself I put my 'a few good stocks' in the realm of mad money and the effect of male hormones not to mention hindsight seems to put my most aggressive investments during football season.

I like the discussion often it’s very conservative but we all know, individual stocks is Risky business!!

Peter Lynch! My favorite- so I was born in 1966 But I concur here with the entertainment factor & NFL network is my favorite channel.
Since I Er’d 4yrs ago officially @51 sort of pre-retired
at 49.8. My trading blog post uses Hindsightis20!

Sr. in high school 1984 Civics short peak into stock market lesson - mock $1000 I bought Coke KO
Nike NKE and McDonald’s MCD came in 2nd place.

Fast forward first broker acct. Charles in 1993.
Individual stocks? Get Rich not quite if only I bought same 3 stocks I did in my Sr year.

*Real*money makes it different- Thank goodness for my 457(b) ~ 401k sibling and Index mutual funds!
IRA converted to Roth still have Charles brokerage
I’ll call it entertainment also. Netflix @$8sh sold at $24 how was I to know? Too many losers to list!
That’s just it, no one list those?!? Losers! But after 30yrs on the same job, deferred savings paid off! Goal was $500k end result was just over 2x the Goal!

Funny, just left Vegas braved the New Raider Football stadium fans all wore masks. Boy was I entertained! NV first to set standard all fans “must” be vaccinated cannot accommodate religious or medical exceptions. Travel again 2022 ~ Blow some dough! Fire/calc & Monte Carlo $$ won’t run out

I would never put all my life savings on Black!
Stick with AA 60/30/10 ~ oh I like CASH

I still dabble individual stock makes me pay attention to market closer, entertainment, like my slot play.
Appreciate the experienced post year I was born!
I’m very fortunate loved savings + pension

 

[WhenIsItTime]

I’ve always had 30-50 individual stocks,, many from Motley Fool recommendations, as a basket at about 15% of my portfolio. I’ve tracked results over the last 6 years this basket has essentially matched the S&P 500 (thx mostly to APPL). This is before tax, so likely trailing on net basis since stock portfolio has short term gains. I do enjoy “trading” and consider myself lucky to match the benchmark given how strong the benchmark has been over this time period.

We are truly in a blessed period the last 10 years for holding stocks!!

 

[Luvtoride]

You should go to vegas and put it all on 16 black - you would be amazed how much money you could win - or better yet put it all into lottery tickets

 

[olyveoil]

The analogy that comes to mind is "there are so many lottery tickets that win big." Yes there are, but which ones? If you have a skill for picking hot stocks, good on ya. I've never had the touch. Decades ago I quit buying stocks because I was sick of losing money. Thank God for real estate or I'd never retire.

My brother on the other hand has been a frothing Apple fanboi since the early 80's. I have no idea how much money he's made on AAPL, but it's a lot. More recently he's also become a zealous acolyte of the Church of Tesla, and he's made a bundle on that too. So I know it definitely can be done. Just not by me, in my experience.

My active investing isn't "pick a good stock to hold longterm," but "create a process to select the asset (commodities, forex, ETFs) to hold right now." For over 20 years I've been interested in active trading with mechanical rules I developed. I've often been extremely successful with it. It's not easy, and it gets harder all the time as the market "learns" and evolves, but it is often very rewarding.

Not even close analogy.
There is an infinite number of lottery tickets. Infinite. There is a finite amount of stocks to own.
Further, lottery tickets are 100% luck. Stocks are not.

 

[NW-Bound]

I have never been an indexer. I used to buy a mixture of active funds, growth and tech MFs as well as conservative dividend funds. Then seeing how the growth funds cratered after the 2000 meltdown, I decided that I could buy individual stocks myself and not rely on these managers.

I stay reasonably diversified, but overweigh different sectors as I see fit. Currently, it's semiconductor, industrial metal and fertilizer mining, and energy. I have plenty of growth and tech stocks, but shun the ones with high P/E. Growth, yes, but I will not pay nosebleed prices for pie-in-the-sky promises.

Over the last few years, I roughly matched the S&P return, but with a stock AA varying between 55% and 80%. I guess my stock picks as a whole beat S&P, even though I have never once owned any of the popular stocks like the FAANG stocks, or Tesla and the like. I am just not interested.

...There are so many great businesses worth investing in individually, ones that can return 50% t0 100% per year or more--returns you won't get from your typical index fund. This is why.

Very true. The more risk the more potential reward. But what would you be writing about now if the stock you had invested in had lost 90% of its value over the same time period?

Don't buy the stocks that go down. Or if you did, pretend it did not happen, and go look for something else.

My single greatest failing as an investor has been holding too long. I have researched carefully, found some great stocks and seen them go up 2x, 3x, 4x or more in relatively short order, only to have them subsequently give up most of those gains before I got around to selling. What I should have done is stayed on top of the them better and asked myself anew every week or so "would you buy today" And if the answer was "no" I should have sold right then.

+1

One needs to know when a stock gets bid to the stratosphere, in order to book the gain. Only the Reddit youngsters would wait for a stock to grow "to the moon".

Over time I developed a couple of rules. (1) If it falls by 10%, sell. (2) If it rises by 30%, sell...

Over what time frame?

Most stocks will grow 30%, given a long enough time. They have to, just to keep up with inflation. The ones that don't, usually go bankrupt.

 

[pb4uski]

My single greatest failing as an investor has been holding too long. I have researched carefully, found some great stocks and seen them go up 2x, 3x, 4x or more in relatively short order, only to have them subsequently give up most of those gains before I got around to selling. What I should have done is stayed on top of the them better and asked myself anew every week or so "would you buy today" And if the answer was "no" I should have sold right then.

Or put in a stop loss order if it has had a good run and revise it periodically as the stock goes up?

 

[Gumby]

Or put in a stop loss order if it has had a good run and revise it periodically as the stock goes up?

That would work too, and I have tried it, but I have not been attentive enough to do it well. That's why I have gradually sold off my individual stocks (I'm down to 2 names) and moved to mutual funds. Someone else can worry about it for me.

 

[NW-Bound]

One can set a trailing stop loss order, where the price is automatically raised as the stock price rises. The trailing stop can be set as a percentage, or a fixed dollar amount.

I used to do this, but with mixed results. Many stocks bounce so violently, such that you will be sold out even with a 10% trailing stop, just to see the stock bounces back up next week.

For example, AA (Alcoa), one of my stocks, dropped 10% last Thurday, then jumped up 9% today. Crazy market!