A Reader Writes "We took a bath yesterday with COH."
Hello Friends! Thanks so much for stopping by and visiting my blog, Stock Picks Bob's Advice. As always, please remember that I am an amateur investor, so please remember to consult with your professional investment advisors prior to making any investment decisions based on information on this website.

Checking my mail this morning, I saw that I had received another comment from Faith who wrote earlier about Coach (COH).

She commented today:

Thanks Bob,
I wasn't looking for inside info...just some insight.
We took a bath yesterday with COH.

"Coach (COH: sentiment, chart, options), the peddler of such luxury
goods as fine leather purses and made-to-impress day planners, has lost
more than five percent today without any notable news to account for the
drubbing. COH has been in decline mode since late July, dropping about
one-fifth of its value beneath the resistance of its 10-day and 20-day
moving averages. Today's decline shoved the stock beneath its 10-month
moving average, below which the shares have not endured a solid monthly
close since November 2001."
http://www.schaeffersresearch.com/commentary/observations.aspx?ID=14357

Faith

Thanks Faith! I am not a big technician. It just looks from my "point & figure" chart from Stockcharts.com, that the stock doesn't looks as terrible as Schaeffer wants to point out. I basically believe that since COH has been one of the very top performers in the market this past 18 months, that when profit-taking came in, as we are observing right now, the top gainers tend to get nailed. That is just my own particular perspective.

As you know, I just let the stock price dictate my action on a stock, unless something truly fundamental arises to make me sell earlier. Even in those cases, I find I might have done better sitting tight! Thus, since I have taken profits on this stock multiple times, the latest quarterly report still looks solid, well, I shall be sitting tight unless my sell-point should hit.

The stock is still under a bit of pressure today. As I write, COH is trading at $28.16, down $(.78) or (2.70)% on the day. I currently own 102 shares with a cost basis of $8.33 so that looks ok. My last sale was on 6/16/05, when I literally had a 300% gain. Thus, if I were to let the stock retrace to 50% of my last gain, or a 150% gain level, then I should be selling my remaining shares if the stock declines to $8.33 x 2.5 = $20.83. I have a few more points to go before I bail.

As for what you should do, I never recommend buying stocks as they are declining. Sort of trying to catch a "falling knife" as they say in the trade. I also suggest keeping losses very small; I use an 8% loss limit on initial purchases regardless of how long I have held a stock. I have literally sold stocks withing 24 hours of buying them.

Unfortunately, I don't have much more insight to provide you on this. I believe that COH is a solid company , but is currently under pressure in a weak market environment. Good luck and let me know what you do/have done! I hope you don't mind me sharing your comments with our readers here! Your comments are important, your thoughts are appreciated, and your participation is very-much desired!

If you have any other comments, or questions, please feel free to leave them on the blog or email me at bobsadviceforstocks@lycos.com.

Bob