Author Topic: Should I sell?  (Read 4590 times)

Texan

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Should I sell?
« on: August 05, 2014, 04:38:07 AM »
A few months, when I began investing in general I was influenced by a friend and Peter Lynch's book to invest in a individual company. So I did, I invested about $1300 in ONE company when its share price was 15.80, it went up to 17.20 and then dropped bad, to now at 12.30. I have lost about $300.

I am a heavy indexer with vanguard already and will never invest in a single company again. I learned my lesson. I did my homework, read the companies 10-K and their financials looked great! But alas, I am done.

I have two options:

Should I sell all shares, close my account with this broker (Online) and take that money and put it directly into VTI. or...

Wait and see if it will raise all the way back up to 15.80 so I do not loose so much?

I dont mind the lose, It was a valuable lesson, that even though a companies' financials are great, the market has different plans.

Thanks!

Khan

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Re: Should I sell?
« Reply #1 on: August 05, 2014, 04:44:25 AM »
Depends on a couple of things.

1. How much of your current stash is this?
2. How bothered are you by this?
3. Have you looked into the stock? Is the fundamental thesis of investing in this stock still intact? Stocks move up and down, and last week was a broader market decline to boot, do not expect that you'll be investing in a stock at the very bottom of it's trading range, this is one of the benefits of decent dividend payers, if they drop, you dejectedly smile, say "well, DRIP will perform better for me here!" and move on.

The answer to these questions, and what to do, is up to you.

Edit: Also important is how long your viewpoint is. In the short term, the stock market is a popularity contest, and right now your stock sounds like Justin Bieber, but is it? In the long term, is it The Beatles? In the long term the stock market acts as a weighing machine.
« Last Edit: August 05, 2014, 04:46:44 AM by Khanjar »

hodedofome

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Re: Should I sell?
« Reply #2 on: August 05, 2014, 07:19:47 AM »
Take it from a fellow Texan. Sell everything. Unless you have an exact, written plan for what to buy, when to buy, how much to buy, and when to sell, you're just guessing and gambling and betting on a random outcome. Take the loss, chalk it up to an expensive lesson that you'll never forget. Don't buy individual stocks unless you know EXACTLY what you are doing.

I love Peter Lynch but the key to his methodology is to first discover a company that you run into in your everyday life, and THEN do a lot of research to see if it's a good investment. It's the second part that's difficult and overlooked by most lay people who read his book. And even after you've done your research, be prepared to be wrong at least 40-50% of the time.

soccerluvof4

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Re: Should I sell?
« Reply #3 on: August 05, 2014, 08:32:01 AM »
Take it from a fellow Texan. Sell everything. Unless you have an exact, written plan for what to buy, when to buy, how much to buy, and when to sell, you're just guessing and gambling and betting on a random outcome. Take the loss, chalk it up to an expensive lesson that you'll never forget. Don't buy individual stocks unless you know EXACTLY what you are doing.

I love Peter Lynch but the key to his methodology is to first discover a company that you run into in your everyday life, and THEN do a lot of research to see if it's a good investment. It's the second part that's difficult and overlooked by most lay people who read his book. And even after you've done your research, be prepared to be wrong at least 40-50% of the time.


While i agree in part with hodefome....its kinda hard to give anyone advice on any stock/investment not knowing anything about it.  If its in cyclicals and comes back 4 fold than depending on how long you have owned it , it might be worth holding on to. Is there a dividend paying you to wait etc...  There are so many things you could do but based on the fact that you didnt share a single thing at all other than it moved up and then down at all to give you really offer you and strategical advice then dump it and move on.

Cromacster

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Re: Should I sell?
« Reply #4 on: August 05, 2014, 08:41:18 AM »
Without knowing anything else, I'd say ride it out.

But, if a $300 drop scared you so much.....don't invest in individual stocks.  Have an investment plan and stick to it.

surfhb

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Re: Should I sell?
« Reply #5 on: August 05, 2014, 09:20:56 AM »
Yeah....if it's only a paltry $300 I just wait it out.    I don't think you're cut out for individual stock investing.   The evidence has shown that a well diversified, indexed portfolio with a set it and forget it attitude will be your best bet. 

Go find other things to do with your time then worrying about the stock ticker :)

hodedofome

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Re: Should I sell?
« Reply #6 on: August 05, 2014, 09:50:26 AM »
While i agree in part with hodefome....its kinda hard to give anyone advice on any stock/investment not knowing anything about it.  If its in cyclicals and comes back 4 fold than depending on how long you have owned it , it might be worth holding on to. Is there a dividend paying you to wait etc...  There are so many things you could do but based on the fact that you didnt share a single thing at all other than it moved up and then down at all to give you really offer you and strategical advice then dump it and move on.

Agreed but the way the original question was phrased, this was the guy's first individual stock and he doesn't really know what to do. That tells me that it was done on a whim and those trades never work out. There is no way any of us (or anyone else) can say that this stock will for sure go up in the future. It's best just to take the loss (the only thing that's certain in this scenario) and move on.

soccerluvof4

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Re: Should I sell?
« Reply #7 on: August 05, 2014, 10:05:36 AM »
While i agree in part with hodefome....its kinda hard to give anyone advice on any stock/investment not knowing anything about it.  If its in cyclicals and comes back 4 fold than depending on how long you have owned it , it might be worth holding on to. Is there a dividend paying you to wait etc...  There are so many things you could do but based on the fact that you didnt share a single thing at all other than it moved up and then down at all to give you really offer you and strategical advice then dump it and move on.

Agreed but the way the original question was phrased, this was the guy's first individual stock and he doesn't really know what to do. That tells me that it was done on a whim and those trades never work out. There is no way any of us (or anyone else) can say that this stock will for sure go up in the future. It's best just to take the loss (the only thing that's certain in this scenario) and move on.



Thats why I agreed with you! :-)

tarheeldan

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Re: Should I sell?
« Reply #8 on: August 13, 2014, 03:11:42 PM »
I agree we need more info but at the end you'll decide if you think it will go up in the future.

Either way you should familiarize yourself with sell stops to help avoid this in the future. You should always know your worst case scenario when entering into a trade. And you could put one on if you're going to hold.

solon

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Re: Should I sell?
« Reply #9 on: August 13, 2014, 03:28:44 PM »
Why do anything? Why not just hold onto it? In 20-30-40 years you will have completely forgotten about this little dip.