Author Topic: Realize 200% stock gains or...?  (Read 3666 times)

Mr.GrowingMustache

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Realize 200% stock gains or...?
« on: September 06, 2016, 07:16:34 AM »
Hey all,
So I am in a predicament that we all want to be in, one of my stocks (AMD) has gained about 200% profit. I have been sitting on AMD for about 1-2 years, and as you know recently it exploded. I've made about $5k in gains \0/

I thought about selling half the shares at 40% gain, than at 100% gains.... only to hold out to see 200% gains!

Am I Getting greedy in keeping it? I definitely am! But the same has hapened with Amazon and Netflix, I dumped them on like 30-40% gains, only to see them explode over 100-200% gains lol

I have been thinking of selling half of the shares.

What would you do, why?


Financial.Velociraptor

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Re: Realize 200% stock gains or...?
« Reply #1 on: September 06, 2016, 09:25:08 AM »
I'd go with a trailing stop loss.  Lock in most of your gains but leave a winner room to run.

tonysemail

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Re: Realize 200% stock gains or...?
« Reply #2 on: September 06, 2016, 09:55:31 AM »
Do you know something about AMD that the market doesn't?
I'd take the gains and run. 

Mr.GrowingMustache

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Re: Realize 200% stock gains or...?
« Reply #3 on: September 06, 2016, 10:47:46 AM »

I'd go with a trailing stop loss.  Lock in most of your gains but leave a winner room to run.

That is a great alternative! I might actually do this! Thanks!




dougules

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Re: Realize 200% stock gains or...?
« Reply #4 on: September 06, 2016, 11:02:04 AM »
I had Weight Watchers stock because I was using their app.  When I switched over to Myfitnesspal I decided to sell the WTW stock.  The stock was up ~50%, but since I hadn't had it quite a year I decided to wait until it would be counted as long term capital gains.  Bad move.  It crashed right after that. 

I'd say sell it now.  Although if you sell, where do you plan to put the $?  Index funds or is this just play money?

jjcamembert

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Re: Realize 200% stock gains or...?
« Reply #5 on: September 06, 2016, 02:11:09 PM »
Implied volatility in AMD is high, so sell covered calls if you're thinking of selling anyway. Selling some stock off as you suggested is another simple way to shorten your position.

Really depends what your overall portfolio looks like and why you bought AMD in the first place. What do you think AMD is worth? Do you think they will continue to grow their business over the next 20 years? Can you afford to take the risk associated with holding it? How correlated are your other holdings to AMD? If this is a taxable account, do you have losses you could offset capital gains with?

Work on getting a consistent buy/sell strategy in place because you aren't always going to be able to pick winners.

jjcamembert

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Re: Realize 200% stock gains or...?
« Reply #6 on: September 06, 2016, 02:46:27 PM »
Realized I didn't comment on the stock itself, if that's what you were looking for. I don't follow AMD, but I do follow NVDA which has also seen sizable gains recently. I personally think both are way overvalued at this point (I got out of NVDA around $45 and waiting for it to fall below $60 ATM) and wouldn't initiate new long positions in either at this point. But pound-for-pound, I think NVDA is clearly the leader in the GPU business and AMD has a lot of catching up to do, plus they pay a dividend. And my personal observation: In the graphics and data processing world, everyone's using Nvidia; there's no competition right now. I haven't even heard anyone mention AMD. Maybe if they can figure out a lower-cost alternative. AMD's negative balance sheet the past several years doesn't give me warm fuzzies either.

misterhorsey

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Re: Realize 200% stock gains or...?
« Reply #7 on: September 06, 2016, 07:48:52 PM »
I take out my original investment, and leave the rest to continue to pay dividends or go further up.  And ideally hold forever. I don't think this is necessarily the best strategy but its one way of crystalising some gains and keeping some upside if you genuinely think that the company continues to have prospects.

I had one share go up by 174% and didn't take anything out.  Its now only up by 30%.  I could have crystalised a significant gain and still kept some upside.

I had one share go up by 300%, after which I took out my original investment and its now up by 269%.  So I did crystalise that gain and kept the upside.

I have plenty of losers as well, mind you.

There's no way of knowing how each company will perform.  Overall my portfolio probably performed same or similar to the he index, once you balance out the winners and losers. Which is why I've moved all new money to indexes.

However, one of the reasons I'm holding onto so many shares at the moment is because of the tax reasons. If I sell now while I'm still earning a salary I'm up for a significant tax bill on the gains - so I'm waiting til I have a sabbatical year where I can sell and pay only a small amount of capital gain tax on the gains.  Its never good to have investment decisions guided by tax, but I can't help but hold on if a low income year is just around the corner.



k9

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Re: Realize 200% stock gains or...?
« Reply #8 on: September 07, 2016, 03:07:41 AM »
Do you know something about AMD that the market doesn't?
I'd take the gains and run.
Do you know something about AMD that the market doesn't?
I'd keep it.

patrickza

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Re: Realize 200% stock gains or...?
« Reply #9 on: September 07, 2016, 08:20:08 AM »
I believe in the efficient market hypothesis and therefore AMD is currently fairly valued.

The right thing to do is buy the whole market, and the right time to do so is asap.

The fun thing to do is to try outsmart everyone. But if you could do that reliably you could pick a fund manager position and pretty much your salary too.

MoonLiteNite

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Re: Realize 200% stock gains or...?
« Reply #10 on: September 09, 2016, 06:08:23 AM »
I am a newish swing trader, 1 year now. And i personally love trailing stop losses for nice gains like this. It is a limit you put down, and forget. Do not use $ but rather use a %. I would do something like 4%, and give it room to keep going up, and if it does dip down and you get knocked out, you still made some good monies!

I personally got in and out of AMD like 9 months ago, at 4 and out at 4.15, the price was at 4.50 and my trailing stop loss sank back down that day, only for the price rebound and keep going up. But that was my risk.

Mr.GrowingMustache

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Re: Realize 200% stock gains or...?
« Reply #11 on: September 09, 2016, 09:01:56 AM »
Update... I initiated a "manual" limit stop yesterday and sold half the stock, keeping my original investment. Should have done an actual limit stop when originally posted my question but it's all good.

Great advice guys!