I sold another loser. What is the market telling me?

Saturday, August 9, 2008

I had been long on POT for a couple of months and I made money initially.  In the past month or so, the stock fell from $240 to $171.  This week I sold it.  This market has confused me.  Earlier in the year I vowed to be an investor, but the harsh sell off of recent months forced me to sell a few positions.   Previously, I wrote about selling a loser and the anguish it caused me.  Both of the stocks I sold were commodities stocks, that have experienced great price appreciation of the past couple of years.  But the US dollar stopped falling, institutional investors started to take profit and rotated into other equities, as these stocks had became richly valued.   I stayed too long and tried to fight the trend.  I did not take the profit in these stocks when it was available.

So, what did I learn from all of this?
  1. Take profits when available.  
  2. Don't fight the trend.  
  3. Be disciplined!

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