Author Topic: Took a chance, Got some Reward! (Individual Stock)  (Read 3242 times)

Cromacster

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Took a chance, Got some Reward! (Individual Stock)
« on: November 05, 2013, 07:30:24 AM »
Back in June I decided to purchase $1,000.00 worth of shares in CLF.  It was trading around 17$/share.  It closed at 28.70 yesterday.  The dividend yield is 2.09%.

Should I just sell and move my money somewhere else?  Is this stock worth hanging on to?

arebelspy

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Re: Took a chance, Got some Reward! (Individual Stock)
« Reply #1 on: November 05, 2013, 07:52:44 AM »
Back in June I decided to purchase $1,000.00 worth of shares in CLF.  It was trading around 17$/share.  It closed at 28.70 yesterday.  The dividend yield is 2.09%.

Should I just sell and move my money somewhere else?  Is this stock worth hanging on to?

What was your goal in purchasing it?  To gamble short term?  Own it long term?  Did you have a valuation in mind when you purchased it that you thought it would be fairly valued at?
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Cromacster

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Re: Took a chance, Got some Reward! (Individual Stock)
« Reply #2 on: November 05, 2013, 08:17:45 AM »
To be totally honest...I have no experience with individual stocks and this was my first foray into it.  I felt the stock was undervalued so I decided to purchase some.

So essentially it was a short term gamble, which if sold right now would pay off about $600.

The company has done a good job at reducing it's debt load, and the Iron Ore market has bounced back a bit.  Although most of the analysis of the company that I have read claim they are volatile due to their dependence on the Iron Ore price.  Something like 10$/ton reduction in price takes away any profit they are currently showing.

I am thinking I should just take my money and run.  Put in back into index funds where I feel a little less anxious.

aclarridge

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Re: Took a chance, Got some Reward! (Individual Stock)
« Reply #3 on: November 05, 2013, 08:22:29 AM »
I am thinking I should just take my money and run.  Put in back into index funds where I feel a little less anxious.

That's what I'd do.

KingCoin

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Re: Took a chance, Got some Reward! (Individual Stock)
« Reply #4 on: November 05, 2013, 08:30:26 AM »
The only compelling reason to hold onto it is to increase the holding period to over a year so you can pay capital gains tax instead of income tax on the profit. You can calculate your break-even stock price based on your income tax rate easily enough. If you have some short term losses to offset the gain, I'd do that.

AlexK

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Re: Took a chance, Got some Reward! (Individual Stock)
« Reply #5 on: November 05, 2013, 09:17:40 AM »
I do this kind of thing all the time, sometimes I make a few thousand and sometimes I lose that much. This year has been exceptionally good but remember it is gambling and not a sound investment strategy. I'm playing with only 1%, the rest is in index funds and real estate. If the same is true for you I say sell it and find another  cheap stock to let it ride.

ThisIsBananas

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Re: Took a chance, Got some Reward! (Individual Stock)
« Reply #6 on: November 09, 2013, 10:36:25 AM »
Yeah, the same thing happened with me and GM. It was the first Individual stock I ever owned. I don't fully understand how every aspect of markets and valuations work, but I did what reading I could on GM and it just struck me as incredibly undervalued. I bought it at 23.23 today its at 36.66. I'm sure someone will jump all over me for not being able to write a dissertation on my thoughts, but I believe the majority of Alpha to be attained has, so in January I will sell it and use the profits to fully fund my Roth IRA.  Sounds like you are in a similar boat,  if you feel like your profits have been made, then sell it and move on :) 

Honest Abe

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Re: Took a chance, Got some Reward! (Individual Stock)
« Reply #7 on: November 09, 2013, 10:58:12 AM »
All of my new money in going into index funds but I still keep an account for "play money" such as this.. Good for you!