WHEN TO SELL
May 23, 2013
I don't talk about selling too much. Why? Because if you buy great businesses, the real money is made by holding for the long term. Just ask those who sold Coca Cola when it came public in 1919 at $40 a share only to collapse 50% a year later. The big money is made sitting. Even if you think the world is coming to an end.
Here are some things I have learned over the years to make one a much better investor:
1.) Always hold at least 20% in cash
2.) Buy established companies when they correct or are in a bear market. Hold for the long term.
3.) Buy newer and smaller companies on cup with handle breakouts and limit your losses with a stop 8% under the pivot point.
4.) Sell these newer companies when the market enters into distribution mode (5 or more distribution days within a few weeks).
My newsletters I will be releasing will focus on all steps. Not only will I discuss the mechanics of why long term investing is profitable, but I will also discuss what distribution days are, how to buy stocks that break out of cup with handle formations, and profile stocks fitting this criteria.
If a portfolio is set up properly, you will never be caught with large losses, will have cash to buy at market bottoms, and will learn how to avoid losses on speculative stocks while riding their gains. I am confident this will be the best investment newsletter on the market.
Most all my posts will now just be posted on the new twitter account as I get ready to bring the new website live. Please follow the new twitter page here.