I know siepueddue will make a cheeseburger joke but AAPL has been a great investment thus far. It has surpassed my expectations. I remember the so called options scandal and people though Steve Jobs would be ousted and the stock would tank. never happened. Then there was the lousy earnings report and aapl fell from 98 to 85 in a few weeks. Seemed pretty bad. Shorts piled on...all were forced to cover. There were the double-toppers who thought AAPL would peak at 93 and that never happened. After a blow out quarter and AAPL surged above 100 and never looked back. The idea is simple. Buy quality, good stocks that go up. Not a difficult investment strategy. Don't buy speculative stuff that tanks easily.
I won't make a cheeseburger joke this time because it was a good "investment" and the fact that you called it an "investment" makes me proud of you hamburgler(oops!). When will you sell though? Same with GOOG? When do you sell? Aren't there other opportunities that present higher returns? I just liquidated a large position that has returned about 850% in less than two years to move into others that I think can now give me better returns percentage wise. When do you sell to go after bigger returns percentage-wise?
AAPL is a good company but its stock is priced to super perfection (over priced). Very soon you will change your words. AAPL can go down to 85 and it will still outperform the market and no one will cry. That is why they pay you for $85 PUT.
it isn't about percentages but actual dollars. I can buy some risky OTC stocks using some of my meth9ods make 20% the next day but the catch is that I can't invest move than a small portion of my portfolio in the stock because OTC stocks are risky and can sometimes implode for no good reason. They usually don't implode but I've seen it happen. With AAPL you can sing a large percentage of your portfolio and not have to worry about a meltdown. So is I make 100% with 40K thats 40K profit without too much risk. I will sell AAPL soon. It has been a huge run but no point getting greedy. Just 5 years ago it traded at $10.
It's about both. You're not going to make 850%+ gains with AAPL unless it's in Options and you're a lucky bastard. Trust me, I made plenty and depending on the stock you're "investing" in, you can make huge returns with a good amount invested. You can easily invest a couple hundred thousand dollars without a problem. I don't think trading the OTC is easy and I never claimed to do it, I do like investments on the OTC. I think it's the last bastion of great undervalued stocks that can still rocket. Look at FRPT, I just saw today it's at $30, I remember 3 years ago or so when it was a penny stock at around $1. Look at PRXI, you can't make those gains in most Nas and especially not NYSE stocks. You can easily put $40k into an OTC stock, not sure what you're talking about. $40k isn't much at all in many OTC stocks. I've put a lot more than that into OTC stocks with no problem.
AAPL: PE ratio of 36, net profit margin of 13% AMZN: PE ratio of 116, net profit margin of 2% can AAPL deserve that PE? i guess... but can AMZN?! yowza, i dont know about that.
How do you derive at your selling decisions? Is it purely fundamental or technical or both? I always find selling "at the right point" the hardest excecise when trading discretionary (which I rarely do but still does happen).
I despise the process of selling. I'm bad at entries and exits I'd say. I just sell small lots. In this last case I had to sell a lot of shares and so I just sold in small chunks. Luckily the stock wasn't wildly volatile as many small caps can be, although at one point it did fluctuate about 10% but I didn't sell much as I knew the stock was valued higher and it was due to a bad reaction to earnings that was unjust. I sold most of the shares, 90% of what I am going to sell in total, within 2-3% of the top. That is INCREDIBLE to me...I didn't expect to do that. I expected to kick myself for selling too soon really. It's always hard when you have great profits to take some off the table, but if you get more than a double in anything even kind of shaky, usually you'd want to take half off and the rest is free. You won't be taxed on the original investment and so to get keep half of your position for free is great! I have gotten better since I started investing and just take small lots off the table and don't worry so much about getting it perfect as I'm usually selling small chunks. If you were selling 100k shares of something, $1 would be a huge difference...but if the stock was trending between two points, say $10 and $11 you would have an easier time just selling a few thousand shares here, a few thousand there. It's kind of the only way to sell and remain sane when you're dealing with that much money, unless you really really want out or have millions more sitting in the bank and don't care about that slippage. I don't have many millions and work to preserve but also realize that there will always be that "woulda shoulda coulda" sale at the perfect price. In this actually, I also started buying Call options that expire in December because I love the company still and am confident that they'll be very valuable in the future, helped ease some of the hardship of selling so many shares knowing that the stock could zoom up $1-2 any day. The options would at least throw me a little cookie if the stock did that.
And to answer the original question, it's either or both. If a stock looks tired, depending on liquidity(I like small cap low floaters), technicals might not really help you because you can sell 10k say, but if liquidity dries up buying back that 10k might end up costing you more. I've seen it happen to others and I'm not that confident in trying to trade small caps with low liquidity. Fundamentals are much better. Most small caps are story stocks though too, so sometimes it's momentum. Fundamentally you might just realize that according to what you expect the company to earn, it can't trade much higher in the near future. That's why I sold the above mentioned stock. It'll gain 50% maybe this year...I know I can take my 800% in gains and put them elsewhere and make another 100-200% this year and probably a few hundred percent more next. At some point you have to realize how well you've done and either move to cashP) or reinvest in something you feel can give you another big return.
I think averaging in and out of stocks is a good idea if you did your homework analyzing them. Actually, I guess with some low volume stocks you have no other choice if you don't want to move the price too much. I usually just dump full positions based on technicals since I am not too much of a discretionary value investor. I wish I was better at it though. Do you use any entry/exit prices derived from technicals (support/resistance) or is your trading purely fundamentally driven (earnings, news, sector macro events)? One of my systems a mix of fundamental and technical data to buy/sell stocks and as you said - often the small/OTC stocks are real gems although volatile. I taught myself to never look at the stocks again once I sold out of them. Too painful at times when they doubled or tripled in coming months