When In Doubt Sit It Out

I have reduced my gross exposure over the past week after my portfolio has had an impressive run. A mistake I used to make was to keep large positions after I made large profits, even if I did not have strong convictions. This almost always led to giving back a nice chunk of profits.

I have read many trading books that say to raise positions when one is doing well. That does not work for me. I am able to think with a much clearer head when I have smaller positions. There are no hard and fast rules to trading. Like swinging a baseball bat, everyone must find the style that suits them.

8 comments:

Anonymous said...

LONG WXCO @ 1.18 BOYZ AND GIRLZ.

-OL' DAWG

(i'm the guy who called out snv and wnr, played abk, and tamb)

Tsachy Mishal said...

I know who you are. You have had some nice calls.

Tsachy Mishal said...

Not many gangsters on stock message boards.

Anonymous said...

Why dont u tell us before you make those plays??

I can post my winners only, after the fact, and look like a champ too ;-0

Tsachy Mishal said...

He has posted the trades before hand. I think readers would be interested in the thought process that goes into the trades.

Anonymous said...

You know who I am dawg.

I'm a regular on this blog man. Been since July/August.

I've been posting my trades many many times before they make the move.

I've posted I was long TAMB, PCBC, ABK, BBX, etc etc. Before they went up.

There is a big buyer in WXCO.

My thought process into the trades?

Buy the bottom. That's all there is to it, and make sure the company is not about to delist or go bankrupt anytime soon.

Definitely easier said than done, but over time, you get better at picking bottoms. Because, most of the time, the bottom isn't really the bottom. And sometimes they are only short term bottoms.

Takes a while to figure out the right technical patterns, volumes, and combination of fundamental news

On the flip side, I also short tops but this isn't a volcano shorting market.

Tsachy Mishal said...

What are you seeing in WXCO?

Anonymous said...

I have to admit, I don't make long term plays. But if I did, I would feel comfortable being long this one. That's because some of these plays I make most value guys would run away from. Airlines that are about to go BK, triple leveraged ETF's, banks that could go into receivership.

WXCO has been around for 55 years, they make industrial pipes. Used in construction is my guess.

I was long it in the summer at 1.22 and sold close to 2 bucks thinking they were going to have good earnings.

They had 1 mln in net earnings in 3Q. Which is rare. Most companies, small caps, nowadays are not profitable.

On an annualized basis, WXCO trades on forward earnings of a P/E of 3.75 (based on 3Q).

They had 135 mln in sales in 3Q.

Have about 100 mln in long term debt. Do more than 600 mln a year in sales. Profitable.

Market cap of 15 mln.

Technically, it hit a double bottom today and I bought on the capitulation although not at the extreme bottom.