This week I placed sell orders on two stocks not widely held by clients but instead owned for clients with higher tolerances for volatility. Both have moved up a lot lately so it made sense to take action.
One stock is Telenor (TELN) the Norwegian phone company. It is up about $7 in two days. I sold it this morning at around $47.20. This is not the type of stock where I think a stop order works very well. I have owned the stock for clients for close to two years. The stock tends to not do much for long periods and then hop around furiously like it is doing this week. I would not be shocked to see it open with a $3 gap in either direction, which is what it has done for the last two days. Hence my not using a stop order.
I have a stop order in on another foreign stock. Since the order is still open I'll hold off on the name for now. This second stock does not hop around $3 at a time and so I did use a stop order on this one.
Either trade is open to second guessing but I for one do not know what the stock will do next. My hope would be to either buy them back cheaper or buy them back in six months at the price they are now; I would be happy with either outcome. Of course the second one has not sold yet.
Wikinvest Wire
5 comments:
Those sales may prove timely Roger. As you're probably aware, the Q3 GDP growth number just in from BEA was not good; 1.6%
The market didn't react well to the news but that's just a blip. People will have time to think about what this may mean over the weekend and the market direction next week should give a stronger tell.
One thing seems fairly certain: Roubini, who predicted 1.5% Q3 GDP growth, will now have to be taken a bit more seriously; frankly, if Q3 auto production is revised downward as some expect (e.g., http://tinyurl.com/yclu4s ), even he may have been too optimistic.
Another thought, the bond market may have been on the right track: The odds that the Fed will begin lowering rates sooner rather than later just went up IMO.
ROGER,
How about telling us about a stock or 2 BEFORE you buy it so we can all track it and maybe even go into it. I see you sold 2 recently for big profits which I am sure is accurate. Please enlighten us with stocks you are to buy in the next few days.
I ask this out of respect for you, not making light of your claimed successors!!
RW, interesting point about Roubini, thanks for the reminder.
Anon; we're trying to teach how to fish here...
If you own individual stocks and have a diversified portfolio you should have some stocks that are up a lot.
Do you ever buy put options on stocks
you own to protect profits (especially
when you expect a correction, like
now)???
Jay C.
The short answer is no on put options.
I know other IMs use options but IMO it creates more complexity for clients with no assurance of adding value.
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