I buy companies and ETFs based upon holding certain beliefs about them. I sell when the paradigm shifts based upon new information. When the reasons for buying are no longer there, that is the time to exit. I'm fine holding losers and holding through corrections. I am willing to sell based upon other ideas being more attractive. I sold lots of MMYT earlier this year for this reason along with China, India, and Argentina ETFs along with VT and VTI.
Exactly. As someone who built and later sold a retail business that is exactly the right metaphor. If some inventory is not selling well (i.e. cap apprec and/or divis sufficiently enough) mark it down and get rid of it. Time IS money. No time for hoping and praying
In a business you have to be able to ride out the slow years. You don't just close up shop. And like a business you have to be well funded. You have to be able to let one position sit perhaps a year before it recovers. Also, how are you cutting losses? Because most of the time the damage is done by the time the market opens. I mean look at Sava. What good would a stop done have done anyway?
Going to cash is not the same as closing up shop. I still earn enough with a MM fund to survive and I have capital if an opportunity presents itself. Why let it sit for a year if there are better opportunities available? How long do you let it sit before you have a change of heart. Had I been in SAVA (there is no good reason that I can see) I would have taken my loss the day it broke the prior days low after the freefall. It would have been a big loss but I would have taken it sooner rather than later. I'm sure that I can find a better place to deploy what little capital I have left while SAVA keeps dropping. I know you think you haven't taken a loss until you sell but you have to ask yourself if there isn't something out there that will outperform SAVA over the next year. Surely with your chart reading skill you can find something.
I never cut losses...I cap my risk. Simple as that..I don't over think it. I will hold SAVA until BK and take the tax write-off. I am very skilled at entries if I want to be but even I can't get the exact bottom...you guys don't stand a chance with tight stops. EVERY uptrend has pullbacks so wtf would you want to get stopped out? If you take a stock like MARA there is zero chance that I'm going to cut my losses if I bought it 20 and it was trading at 12 because you know it's going to recover. The only place I would use stops is crypto because at least they work 24/7. I would wager if you add up all the losses prevented by getting stopped out versus all the gains missed by getting stopped out it's probably even.
One man's pullback is another man's reversal. But not using any stops and merely hoping and praying that price will come back up is for fools.
Stops don't work anyway. Unless you're trading crypto stops are f****** useless. The damage will be done by the time the market opens. You can't make money if you're afraid to lose it.