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 advisers prior to making any investment decisions based on information on this website.
I cannot emphasize enough how my trading is driven by the performance of my underlying holdings. Especially in this time of extreme market volatility, having a plan to deal with price moves, whether they be on the upside or downside, is essential. In my own case, each of my holdings has sale points determined at their time of purchase whether it be a partial sale of 1/7th of my holding as the stock appreciates in price, or a complete sale of the holding should the stock decline 8% (or 16% if in the last 5 of my maximum of 20 positions), or at other set points should the stock have previously appreciated and experienced partial sales of that holding.
These sales drive my own responses to the market. On the downside, I either 'sit on my hands' with the proceeds (if I am above 5 positions) or I replace that holding with a new holding of smaller size. In any case, these downside sales drive my portfolio towards cash and away from equities. I am simply trying to "listen" to my stocks as they let me know like that canary in the coal mine whether it is a 'good time' to be investing, or rather a 'bad time' and I should enjoy whatever cash position I can possibly possess.
Johnson Controls (JCI) is a rather new position in my minimum of 5 holdings. These holdings have been decreasing in size in a planned fashion. This morning, I sold 13 shares of my 95 share position at $20.36, 1/7th of my holding, as it hit and passed my first appreciation target which is at a 30% gain over an initial purchase. I had just purchased these 95 shares on 11/20/08, not much more than two weeks ago, at a cost basis of $14.83. Thus with the sale at $20.36, this represented a gain of $5.53/share or 37.3%. It turned out to be a timely sale because as the market dipped later in the day, JCI also turned lower and closed at $19.44, down $(.09) on the day.
With a sale at an appreciation of a holding, I now have a 'buy signal' to add a new 6th position to my portfolio. I shall be waiting for a suitable stock to come along that meets my own criteria for stock selection and shall keep you posted.
Meanwhile, if you have any comments or questions, please feel free to leave them on the blog or email me at firstname.lastname@example.org.
Yours in investing,