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.
The last several trades in my trading account have been on "bad news", declines that have led me to unload otherwise "good" stocks that I like. With these sales, I am required to "sit on my hands" so to speak, and not re-invest the proceeds in another position.
Earlier today, for a change, I had a sale on "good news". This means that one of my stocks hit a sale point on appreciation and not on declining, and a portion of this position (approximately 1/6th of my remaining shares) were sold.
In fact, I sold 21 shares of my 128 share position of Healthways (formerly American Healthways) (HWAY), at $51.73 in my trading account. These shares were originally purchased 6/18/04 at a cost basis of $23.53 (according to my Fidelity account) and thus represent a gain of $28.20 or 119.8% (I was aiming for a 120% appreciation target). This was my fourth partial sale of Healthways stock, having sold shares 11/03/04, 4/25/05, and 7/28/05, at the 30, 60, and 90% appreciation targets.
Having now sold a portion of a position on "good news" and being well under my 25 position maximum size for my portfolio (now including this purchas am up to 19 positions), this entitled me to add a new position. (I purchased 120 shares of Toro (TTC), an old favorite of mine, and I shall write about this on another post.)
When will I be selling shares next? Unless there is an announcement of some negative news on a fundamental basis about the company (in which case I reserve the right to sell my entire position regardless of the price), my portfolio management system directs me to sell another 1/6th of my holding if the stock should appreciate to a 180% appreciation target from my purchase. This works out to $23.53 x 2.80 = $65.88. However, if the stock should start declining instead of appreciating, my strategy is to sell at 50% of the highest appreciation level sale, which in this case would be at a 60% appreciation level. Thus, this would work out to 1.60 x $23.53 = $37.65. If the stock should decline to that level, my strategy would direct me to sell my entire position at that price.
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