Don't be fooled into thinking that your success as a stock investor is measured by the increase in the value of your portfolio's holdings. It may be not. What you really want is to make the most returns with the least risk to your investing capital.
In simple term, you may need to fully understand the wisdom of the ancient Chinese's saying in investing: 见好就收. (It means that if there is a reasonable profit for yourself, don’t be greedy to risk further by wanting more, one should take back one's capital and its returns and leave some on the table for others.)
Don't ever let this happen to you!
Read another related ancient wisdom? 3 Ms of Trading – Mind, Method and Money - Part 3
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Hi CW8888,
ReplyDeleteIn theory yes, but practically it is not so easy. We are creatures of emotions.
For many of us had experience of taken profit of a counter and then horror of horrors, watched this counter with bewildered, wide-opened eyes , soared to become 2 to 3 times multi-bagger.
Of course vice versa, we can give back all the profit the counter has given us because of waiting too long due to our greed.
Do you mind to give a practical example of a counter when you are satisfied to start taking profit?
Thank you.
One such example is the recently sold counter:
ReplyDeleteNoble
I can see you are treating this counter as a trading buy/sell.
ReplyDeleteWhat I mean is a counter you purchased for "fundamental investing"; a supposed long-term buy. When will you be satisfied to sell this type of counter?
200 EMA is known to be used by many long-term investors looking to exit or reduce their long-term holding in a stock.
ReplyDeleteRead? Don't Forget 200 EMA
Hi CW8888,
ReplyDeleteThanks.
I have very "koyak" history for short term trading. But long term trading is quite O K. I always imagine if I had put all my lost short term trading money in long term trading; WOW... my absolute ROC will be 2x better(Guestimate only).